Down the Rabbit Hole

 The City of Los Angeles, with the assistance of the Los Angeles City Council, is slowly but steadily spiraling down the rabbit hole towards bankruptcy.

It has become clear over the past several weeks the LA City Council is unable and unwilling to face the realities of its more than half-a-billion dollar budget deficit. The impact will hit across the transportation systems of a region critical to the national distribution economy.

At the February 16th LA City Council meeting, the directors of LA's three "proprietary" departments — the Port of Los Angeles, Los Angeles International Airport, Department of Water and Power — were called before the City Council to brief members on how many city employees could be "transferred" from other city offices to the proprietary departments. These are the same city departments that had been previously instructed by the mayor to cut costs by eliminating jobs and encouraging early retirement of their employees.

While the Port of Los Angeles was diligent in following the mayor's directive to reduce costs, the reward for being financially responsible and making difficult decisions is for the port to carry the costs of approximately 112 "transferees" — with perhaps more on the way — so that council members can avoid layoffs of city employees.

In an Alice in Wonderland moment, LA City Councilwoman (and candidate for California's lieutenant governor) Janice Hahn pointed out the city was in a "fiscal emergency" and that layoffs of city employees would mean that people couldn't "pay their mortgages." In response, S. David Freeman, the head of the Department of Water and Power, was conveniently agreeable to "cancel contracts" with private sector companies in order to hire more city workers.
Liability and economics of such actions aside, apparently if you are in the private sector, your financial crisis isn't as important as that of the public sector. And politicians wonder why people have lost faith in their government.

John R. McLaurin is president of the Pacific Merchant Shipping Association