A fundamental in all markets is the "risk and reward" principle. If you take more risk, then you may reap more rewards than normal. At the same time, however, you take the risk that your venture will turn out poorly. Then your fate may be far below "normal." Conversely, if you take the safe and prudent route, riches rate not to be yours. On the other hand, you are unlikely to face obliteration.
Lately, however, we have been skewing these normal principles in our markets. Our government steps in and "saves" companies that they deem "too big to fail". Instead of having those who followed poor practices going out of business, they still get rewarded. So it is, too, in some state governents. Witness what is happening in California.
The old deal seemed fair: public employees would earn lower salaries than Americans working in the private sector, but would receive a somewhat better retirement and more days off. Now, public employees get higher average pay, far higher benefits, and many more days off and other fringe benefits. They have also obtained greatly reduced work schedules, thus limiting public services even as pay and benefits shoot ever higher. The new deal is starting to raise eyebrows, thanks to efforts by groups such as the California Foundation for Fiscal Responsibility, which publishes the $100,000 Club, a list of thousands of California government retirees with six-figure, taxpayer-guaranteed incomes. But even in these tough times, public employees continue to press city councils for retroactive pension increases, which amount to gifts of public funds for past services. Officials fear the clout that these unions, especially police and fire unions, wield on Election Day.
The story doesn’t end with the imbalance in pay and benefits. Government workers also enjoy absurd protections. The Los Angeles Times did a recent series about the city’s public school district, which doesn’t even try to fire incompetent teachers and is seldom able to get rid of those credibly accused of misconduct or abuse. Misbehaving teachers are sometimes kept from teaching, but they may spend years, even a decade, getting paid while they fight attempts to fire them. A state law referred to as the Peace Officers Bill of Rights, along with excessive privacy restrictions, likewise makes it nearly impossible to fire police officers who abuse their authority.
Ultimately, there is only one solution. Fire politicians who abuse basic principles of risk and reward. Vote for those who promise to follow sound business practices and not abuse you, the taxpayers and the people