6 ms·

When voters reject a tax increase, it isn't unusual for a city (or even a school district) to make cuts in those services that inflict the maximum pain in the m

by tc 17y ago

When voters reject a tax increase, it isn't unusual for a city (or even a school district) to make cuts in those services that inflict the maximum pain in the most visible way [1,2,4]. Businesses, of course, do the opposite when facing a budget crisis. They cut as far back as possible while still delivering as many of the things that their customers care about as they can [3]. It always seems silly to me when people worry about private sector pseudo-monopolies when we haven't figured out how to fix the incentives of that singular cartel that currently controls about half of our GDP. [1] In part they are just living up to the implicit promises they make when asking for the tax hike. The message is never, "we need to raise taxes or else we'll be forced to cut the salaries and benefits of overpaid bureaucrats and work to operate more efficiently." No, it's always, "we need to raise taxes or else the lights will go out, and you wouldn't want that." You wouldn't expect them to let people down? [2] Another commenter here usefully pointed out that this is an example of the Washington Monument Syndrome: http://en.wikipedia.org/wiki/Washington_Monument_Syndrome http://en.wikipedia.org/wiki/Washington_Monument_Syndrome [3] When I say 'businesses' above, I'm principally referring to the millions of private companies in the US, not the handful of attention-grabbing public firms where management can extract wealth from the shareholders (and the government, in the case of GM and the banks). There is a different set of perverse incentives operating there. An entrenched (government-supported) monopoly could act the same way, as could (to some degree) a politically entrenched department head of a private organization. The bad incentives derive from high switching costs resulting in monopoly economics. [4] Regarding rigor (questioned below): 1) my claim about what is usual in these circumstances is based on my own personal observations working with local governments; 2) I cited the Wikipedia article for naming of the phenomenon, not for rigorous support of its existence (be your own judge for that), and 3) this is already more rigorous than I intended to be for a simple comment about a common phenomenon that others have observed and noted long before the internet was available for us to debate every ontological question at length.

chez17 17y ago
I don't think it's as deliberately evil as that. It's probably more along the lines of someone one thinking, "Do I cut my own salary or drop a fire fighter? Hmmm... My house hasn't caught on fire yet!"
- thaumaturgy 17y ago
  Or, maybe, it's a move by a number of officials that are as frustrated by the situation as everyone else, and doubly so since nobody else really knows the situation as well as they do.
- psranga 17y ago
  In most instances maybe, but here the mayor and council jobs are part time and pay $6250/yr (vs $89,000 yr avg for city worker).
akeefer 17y ago
I think the analogy there is pretty inaccurate: businesses do cut back on services they offer when their revenue decreases. If business A loses half their revenue, it's probably because they've lost half their customers, meaning they're now only providing half the services. In the worst case, they go out of business and no longer provide any services at all. If a city government loses half their revenue, though, they're still expected to provide exactly the same services to the same number of people as before, and everyone cries bloody murder when services are cut, assuming that there must be something else to cut instead. Logically, the analogy doesn't add up. I totally agree that the incentives for government to be capital-efficient are very difficult to align properly, but I just don't buy the comparison to how a business is run.
jellicle 17y ago
Yes, the first thing any corporation with a budget crisis does is cut executive perks, because... Wait, what?
seigenblues 17y ago
While the first sentence helpfully has a footnote, it does not actually cite anything. Unfortunately, the second footnote lends no more actual factual basis to this argument either. The wikipedia article linked to uses equally vague generalities and has a similar pessimism towards elected officials -- it cites two articles from the NRO and a pretty bad article from the LA Weekly. This comment is a conjecture -- one that assumes the worst in our public servants, and which does not actually cite evidence that people behave that way. In fact, to show the lack of rigor in the argument, the point he makes could apply equally well to a business: "It's not unusual" for a shafted department head to try to cripple his unit (on paper or in practice) to demonstrate the vital need to have his budget restored in the next year. Sounds just as plausible! or, to use the same rhetorical technique to make the opposite point: I would argue that "it's not unusual" for the city officials to make their cuts to cause the _minimum_ pain possible, on the grounds that they want to be re-elected.
seigenblues 17y ago
I see you've updated your comment! re: [4] 1) I'm glad you've had personal experience with this! Cool! 2) Having a name for a phenomena does not mean that the phenomena actually exists. and 3) It's hard to see that this is "more rigorous". I was trying to point out that your (highly upvoted) comment didn't actually include any references, citations, or facts, although it appeared to. It also seemed to be a (very well written) variation on the "some people say..." mode of rhetoric, which was further enhanced with a very authoritative tone. I don't think it becomes an ontological or epistemological discussion to query for additional sources/evidence/data. I was trying to courteously say "hey, that statement had no sources", especially because i don't believe that this is a very common phenomenon. I will do so more bluntly next time. That said, your state legislators are some of the lowest paid public servants there are (http://www.empirecenter.org/html/legislative_salaries.cfm http://www.empirecenter.org/html/legislative_salaries.cfm). Unglamorous, unappreciated, and generally unknown to all but the most attentive citizens, it really pains me to hear some really smart people assume the worst of them.

by tc 17y ago

chez17 17y ago

I don't think it's as deliberately evil as that. It's probably more along the lines of someone one thinking, "Do I cut my own salary or drop a fire fighter? Hmmm... My house hasn't caught on fire yet!"

thaumaturgy 17y ago
Or, maybe, it's a move by a number of officials that are as frustrated by the situation as everyone else, and doubly so since nobody else really knows the situation as well as they do.
psranga 17y ago
In most instances maybe, but here the mayor and council jobs are part time and pay $6250/yr (vs $89,000 yr avg for city worker).

akeefer 17y ago

I think the analogy there is pretty inaccurate: businesses do cut back on services they offer when their revenue decreases. If business A loses half their revenue, it's probably because they've lost half their customers, meaning they're now only providing half the services. In the worst case, they go out of business and no longer provide any services at all. If a city government loses half their revenue, though, they're still expected to provide exactly the same services to the same number of people as before, and everyone cries bloody murder when services are cut, assuming that there must be something else to cut instead. Logically, the analogy doesn't add up. I totally agree that the incentives for government to be capital-efficient are very difficult to align properly, but I just don't buy the comparison to how a business is run.

jellicle 17y ago

Yes, the first thing any corporation with a budget crisis does is cut executive perks, because... Wait, what?

seigenblues 17y ago

While the first sentence helpfully has a footnote, it does not actually cite anything. Unfortunately, the second footnote lends no more actual factual basis to this argument either. The wikipedia article linked to uses equally vague generalities and has a similar pessimism towards elected officials -- it cites two articles from the NRO and a pretty bad article from the LA Weekly. This comment is a conjecture -- one that assumes the worst in our public servants, and which does not actually cite evidence that people behave that way. In fact, to show the lack of rigor in the argument, the point he makes could apply equally well to a business: "It's not unusual" for a shafted department head to try to cripple his unit (on paper or in practice) to demonstrate the vital need to have his budget restored in the next year. Sounds just as plausible! or, to use the same rhetorical technique to make the opposite point: I would argue that "it's not unusual" for the city officials to make their cuts to cause the _minimum_ pain possible, on the grounds that they want to be re-elected.

seigenblues 17y ago

I see you've updated your comment! re: [4] 1) I'm glad you've had personal experience with this! Cool! 2) Having a name for a phenomena does not mean that the phenomena actually exists. and 3) It's hard to see that this is "more rigorous". I was trying to point out that your (highly upvoted) comment didn't actually include any references, citations, or facts, although it appeared to. It also seemed to be a (very well written) variation on the "some people say..." mode of rhetoric, which was further enhanced with a very authoritative tone. I don't think it becomes an ontological or epistemological discussion to query for additional sources/evidence/data. I was trying to courteously say "hey, that statement had no sources", especially because i don't believe that this is a very common phenomenon. I will do so more bluntly next time. That said, your state legislators are some of the lowest paid public servants there are (http://www.empirecenter.org/html/legislative_salaries.cfm http://www.empirecenter.org/html/legislative_salaries.cfm). Unglamorous, unappreciated, and generally unknown to all but the most attentive citizens, it really pains me to hear some really smart people assume the worst of them.