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:
[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.
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!"
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.
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.
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.
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). 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.
I lived in CS for two years - nice little town but the industries there are having a hard time. Intel shut down their fab and the 'Garden of the Gods' business complex is full of huge carcases from other business that have left the area.
You got that right. Great hiking too, along the foothills and all the way up Pike's Peak. And speaking of "fourteeners," the Collegiate Range is pretty spectacular too.
It is refreshing to see a city being realistic about their budget problems. From what I have read a lot of other American cities seem to just be digging themselves a bigger hole.
How would communism solve this? Even if it would solve this problem it creates lots of other problems. Capitalism may not be perfect but it's worked well for the U.S. so far. Before we decide to completely change our economic system we need a better reason than money problems for one city.
It's been tried and it didn't work. It fails to take into account some basic human nature such as the fact that humans care about themselves more than they care about society, and that noone will work without incentives.
The lights out Denver actually sounds like a better Denver -- Bravo! No more wasting water on grass. We are facing a real water crisis in the world. No more redundant street lights to pollute the night sky. My car already has headlights and I'd rather see stars and fewer wasted kilowatts and less pollution in the air..
Insurance protects people against loss due to fire and if you are relying on the fireman to save you, you're not very wise. I've watched homes burn to the ground right along side the fire crews. We've already crossed the line into police state, so reduction there probably will have little effect. If you want to reduce the need for cops, make fewer things illegal. Isn't dope already legal in Denver?
I'm with you on the grass (there're movements to use water-saving native American foliage instead of grass, which is suited to a wet England-like climate), and MAYBE with you on the streetlights if they intelligently do it so that pedestrian safety is not impaired.
But not firefighters (but they only cut 3 fighters, so it's probably going to be OK). Fire insurance premiums assume the presence of a firefighters. W/o a good firefighting force, a fire that burns down one house will probably end up burning down 100.
You watched a house burn down but did you notice that none of the others burned down?
For some number of home owners n it will be more economical for them to all chip in and buy a fireman or two than to pay the additional premiums that result from the cut.
Capitalism can work here. Taxes don't need to buy firemen.
You're getting close to the truth of our own situation up here in the mountains. We have a volunteer fire station down the road several miles. However, our fire rating was still fairly high because fire trucks would have to make many trips back and forth to grab water and come all the way back up the mountain.
So the property owners' association purchased a big water tank on top of the mountain. Now the fire trucks can refill locally without making long trips back down to the lake to refill. So that helped a good bit.
Also, all of the roads up here are privately owned and maintained by our property owners association, and our annual dues have not increased in 9 years.
A privately funded fire service would only put out fires in those buildings or neighborhoods which had paid the fire fee. Poor areas, where the residents could not easily afford the fire fee, would be at risk of burning down. Capitalism is not a reasonable way to provide firefighting services.
Since you're the one advocating a system different from the status quo, the burden is on you to provide a serious analysis instead of a glib hypothesis.
To use an Internet/cellphone analogy, sometimes is cheaper for the provider to just provide an "unlimited" plan instead of tracking usage. I'm almost certain the current system of universal firefighting coverage evolved from a previous system of privately purchased firefighters.
In other words, I strongly suspect that the 'n' value here is "whole city".
No problem, I'm completely cool with any business plan that does not include clauses such as "And in this case, we take all your stuff and lock you in a cage."
What is it today with these troll bait stories -- there is no interesting discussion about this topic.
Votes decide not to enact tax, government cuts services that effect citizens the most -- this has happened throughout history; it's called the Washington Monument Strategy
that's one of the thinnest wikipedia articles i've ever seen. C'mon, outside of the hysterical NRO articles it has at the bottom, can you show me another example of it "happening throughout history?"
"I think it's unfortunate when some use what has often been called the Washington Monument strategy," Mr. Pataki said at a news conference. "When you make a cut, you immediately say you are going to cut the Washington Monument because it is the most visible way to get public attention."
http://www.nytimes.com/1995/03/15/nyregion/suny-trustees-pla...
31 comments
[ 2.8 ms ] story [ 78.3 ms ] threadBusinesses, 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
[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.
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.
Wait, what?
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.
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). 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.
Insurance protects people against loss due to fire and if you are relying on the fireman to save you, you're not very wise. I've watched homes burn to the ground right along side the fire crews. We've already crossed the line into police state, so reduction there probably will have little effect. If you want to reduce the need for cops, make fewer things illegal. Isn't dope already legal in Denver?
But not firefighters (but they only cut 3 fighters, so it's probably going to be OK). Fire insurance premiums assume the presence of a firefighters. W/o a good firefighting force, a fire that burns down one house will probably end up burning down 100.
You watched a house burn down but did you notice that none of the others burned down?
Excellent point. I highly encourage any insurers in that area to hire some firefighters to reduce their liability.
Capitalism can work here. Taxes don't need to buy firemen.
So the property owners' association purchased a big water tank on top of the mountain. Now the fire trucks can refill locally without making long trips back down to the lake to refill. So that helped a good bit.
Also, all of the roads up here are privately owned and maintained by our property owners association, and our annual dues have not increased in 9 years.
To use an Internet/cellphone analogy, sometimes is cheaper for the provider to just provide an "unlimited" plan instead of tracking usage. I'm almost certain the current system of universal firefighting coverage evolved from a previous system of privately purchased firefighters.
In other words, I strongly suspect that the 'n' value here is "whole city".
What is it today with these troll bait stories -- there is no interesting discussion about this topic.
Votes decide not to enact tax, government cuts services that effect citizens the most -- this has happened throughout history; it's called the Washington Monument Strategy
http://en.wikipedia.org/wiki/Washington_Monument_Syndrome
Well you just provided some good insight that I've never heard of before.
"I think it's unfortunate when some use what has often been called the Washington Monument strategy," Mr. Pataki said at a news conference. "When you make a cut, you immediately say you are going to cut the Washington Monument because it is the most visible way to get public attention." http://www.nytimes.com/1995/03/15/nyregion/suny-trustees-pla...
http://writteninfo.com/2009/04/fire-department-in-fairfax-co...
http://www.taxfoundation.org/blog/show/24528.html
http://www.cato-at-liberty.org/2009/07/15/the-washington-mon...