Sunday, October 24, 2010

Should We Regulate Cities?

I can't help thinking what the "deregulation contingent" of political thinkers would do about the situation in Bell, California, where a corrupt city council, in collusion with a city manager accused of criminal activity, raped the treasury of millions of dollars by paying themselves excessive salaries, sometimes for meetings that lasted only a few minutes.

While most city managers are hard-working, dedicated civil servants who earn upper-middle class wages in the neighborhood of $200,000 to $300,000 per year, the guy in Bell was "earning" more than a million, including benefits -- and Bell is a small city! Four of the five city council members were "earning" more than $100,000 annually -- for part-time jobs.

Now, if we're going to deregulate multi-billion dollar companies, as the capitalist purists would have us do, then philosophically we also have to deregulate cities. I can hear some people favoring this strategy already -- let the citizens patrol their own elected officials and vote them out of office if necessary! And let the elected officials supervise the city employees.

OK, that might work in a perfect world, where people are reasonably honest (if not always intelligent or guided by true public service) and information is available to those who attempt to monitor events. But more and more, we see that such a world eludes us.

Take the banks, for example. First they (and other mortgage companies) screwed members of the lower-middle class by putting them into unaffordable loans guaranteed to fail, in order to make short-term profits. After that little fiasco just about brought the country to its financial knees, we discover that some of the same institutions are now foreclosing without paying any attention to proper procedures -- once again, in the headlong rush to make money. These are the companies we are supposed to trust to regulate themselves?

No, self-interest is a powerful motivator, in the public sector (unfortunately) as well as in the private sector. The founders understood this clearly, by the way -- in a vastly more sophisticated fashion than today's Tea Party members and other deregulatory proponents. At a minimum, we need reporting rules so that enterprising citizens (and fortunately, media outlets like the Los Angeles Times that still perform the valuable service of investigative reporting) can legally demand information that people in charge would rather hide. And yes, reporting is one form of regulation. Without that essential element, we might as well not have laws, because public interest organizations would be hamstrung in their ability to identify and expose malfeasance.

For whom does the regulation Bell toll? It tolls for all of us. Because if the capitalist system that thrives on self-interest were "free" to operate unfettered, corruption would be even more widespread than it is now.


  1. Really important topic to focus on the corruption in terms of the cities and the need for regulation all over, not just in the financial world. Though there is clearly much to be desired on the latter front. Case in point the recent news about the major negligence and mismanagement of foreclosure paperwork by so many of the banks. I think your willingness to take a nuanced view from the left side and not deny the problems with the government as well shows how insightful and open-minded a writer and thinker you are, and why readers should keep coming back for more!

  2. It's somewhat oversimplified, but I believe we can say that the shadow side of both capitalism & political power is greed-- greed that can sometimes become quite infinite... To me, there needs to be ongoing regulation in just about any situation, to provide for balance of power & to foster adequate accountability. I'm sure there is more elaboration possible on this, but at present I'm too sleepy to think further! Marty