Governmental Poison Pills - Not A Good Idea

In the corporate world there's a debate whether poison pill provisions, which trigger unpalatable consequences if outside interests acquire too much of the corporation's stock, is a good thing or a bad. One viewpoint is that they stop greedy corporate raiders from pillaging helpless enterprises, while the opposite view is that they protect entrenched management which may be operating inefficiently.

One clear thing, however, is that poison pills in the government context are absolutely ludicrous. But that's what we have here in the city of Los Angeles, which last year agreed with city unions that if the city laid off city workers, the remaining workers would automatically be entitled to a pay increase. This is the height of idiocy, particularly since this is a new provision that was actually crafted in a time of budget distress. Where labor costs both in the aggregate and per unit needed to be reduced, the city agrees to increase its cost of labor. All this proves is the oft made contention that the city of Los Angeles is controlled by the public employee unions. Incredibly, despite this poison pill provision, the city wants to lay off city employees, triggering this automatic pay increase for the survivors. This could make sense if you laid off enough employees to offset the cost of the pay increase, but that's not what they're doing.

However, this episode demonstrates a much wider shortcoming in the way government is operated. Politicians are always talking about cutting the fat and inefficiencies from government. Indeed, this is the rallying cry for anti-tax activists who resist increasing government revenues at all costs because there are so many inefficiencies in spending that can be attacked. But this is government we're talking about, Alice In Wonderland in its most extreme incarnation. The sad fact is that it is impossible to cut most of the fat out of government spending. Cutting the fat implies the existence of a surgical knife that can disintiguish between fat, muscle and bone. Such an instrument does not exist. It appears the only government tool available is a hacksaw which cuts equal portions of fat, musicle and bone. I have personally heard of two situations in different departments of city government where individuals are paid highly for doing nothing, but in this era of tight budgets, have absolutely no fear of losing their cushy jobs. My sources do not know why these people are protected, but this just adds to the tons of evidence that government is dysfunctional and is incapable of efficient financial operation. Sad but true.