Los Angeles: The Next Failed Government?

Bruce Bialosky | March 9, 2014

When analyzing some governments, it becomes easy to see why they are failures. Venezuela is one that comes to mind. Argentina is more challenging to analyze, but its recent turn to the left and a more authoritarian government has once again brought the economy near collapse. Detroit is the shining example of a failed government within the Unites States. The question is: will Los Angeles become the next government to crumble?

I have believed Los Angeles was a disaster in the making for a long while. It has a government that drives businesses out with an oppressive tax structure that can be five times higher than neighboring cities in its midst. Then they follow up with a slanted audit process that attempts to extract even further revenue to feed its bureaucratic beast. The roads have deteriorated in such a fashion that the home of the “fun and sun” car culture — where driving is very much a necessity to navigate a spread-out city — are now rated the #1 worst in the country. The issues go on and on making the largest redeeming factor being the fantastic weather.

Now I am not the only one who is citing the failings of Los Angeles as a city. A commission established by the Los Angeles City Council President, Herb Wesson, and a former Commerce Secretary, Mickey Kantor, has weighed in saying Los Angeles is a mess and a disaster waiting to happen. The commission, called Los Angeles 2020, issued the first of its two reports which detailed status of the City.

The beginning of the report at least speaks honestly, almost. It is called A Time For Truth. Some of what it outlines is that 28% of Los Angelenos earn poverty pay. If you include those out of work, they state 40% of residents live in misery. Los Angeles is the only one of seven major metropolitan areas in the country to have a net decline in employment over the last decade. Major industries are leaving; none are moving here. Twelve companies on the Fortune 500 used to call Los Angeles home, and now just four do. The school system graduates just 60% of its students from high school and only 32% are qualified for either the UC or Cal State University systems. The pension system has set aside only 10% of the future needs of city workers. These are just some of the devastating facts stated by the commission.

We don’t know what the final report will state, but have some of our own conclusions. One of them is that Los Angeles has lost most its clout within its own state. Joel Kotkin, a professor of urban development and one our greatest chroniclers of urban issues today, has documented this. He has shown how the entire power base of the state has shifted to Northern California, with almost all influential politicians for now and the foreseeable future coming from the north.

What the commission did not do in its first of two reports was point fingers. It would not be expected as the commission was riddled with members of the power elite of Los Angeles. But here are some of the salient facts: 

1. Other than Richard Riordan, who was a Republican and served as Mayor for two terms thirteen years ago, there are almost no elected Republicans in Los Angeles. Typically there might be one member of the 15-seat City Council.

2. Even though the favored candidate of some unions — particularly the one that runs the Department of Water and Power — Wendy Greuel lost the Mayor’s race, this is a union-run city with every elected official beholden to city unions and the SEIU.

3. The school district though independent from the city government is run by a seven-member school board that would faint at the sight of a Republican.

Does this sound familiar? A city run by liberals, leftists and public employee unions is running the city into the ground. People are driven outside the borders of Los Angeles by two major factors that have not changed and only gotten worse over the 45 years I have lived here: 1) the school system stinks and anyone with means moves to neighboring communities and/or utilizes private schools; and, 2) the business taxes are so devastating that businesses don’t move here or move out, taking revenue and jobs with them.

For all the high taxes you would think that we would get superior services, but we don’t. As stated above, car-crazy California (run exclusively by Democrats) has the worst roads in the nation with Los Angeles being a pillar of that disaster. The city budget is constantly out of whack due to high union wages and retirement benefits. The city budget, which ten years ago spent 3% on pensions, now spends an astounding 18%. That has caused our response times for fire and police to meet the national standard only 58% of the time.

If you have a city run by Democrats for 50 years with a school system run by liberals for the same period of time, and they are both beholden to public employee unions where a continuous decline occurs, what does that sound like? Detroit. The major differences between Los Angeles and Detroit are two: while their population crashed with 80% of it leaving for better environments, Los Angeles’ has not. It has been filled in by legal and illegal immigrants producing minimal revenues except for cheap labor for the limousine liberals who remain here. And, second, we have blue skies, warm weather and ready access to the Pacific Ocean.

The second portion of the report to come out will be fascinating to read. Will they make substantial recommendations which most likely will be ignored by the elected officials? When will the establishment realize they are playing a losing hand and change the rules of the game? Detroit proved that even in a country like the United States governments can fail from mismanagement. Is Los Angeles next in line?