Special Report: How a vicious circle of self-interest sank a California city

Comments (68)
tmc wrote:

This article just makes me feel sick, angry, and ashamed all at once.

Nov 13, 2012 8:21am EST  --  Report as abuse
Stickystones wrote:

“I don’t know how you could come out of that meeting not understanding we had a serious problem,” McNeely said in an interview. “I told them, ‘You’re headed for trouble, it’s a train wreck. You can’t keep doing business this way.’”
Yeah well Romney said the same thing about this nation, but people don’t want to hear it. One day they will look back on american history and ask what went wrong. Well it was a vicious circle of self-interest!

Nov 13, 2012 9:03am EST  --  Report as abuse
RailBended wrote:

Why can’t public employee unions be managed in a way that depends upon the health of the municipality they are given from? None of this guaranteed malarkey. You get X% of the average salary in your city. You want more money? Make your city better.

Nov 13, 2012 9:27am EST  --  Report as abuse
rossryan wrote:

Indeed. However, as the article highlighted, this is a problem everywhere. It’s a simple case of shooting the messengers, and then wondering how they ended up in their current predicament (“No one told us that bankruptcy was a definite possibility!”).

I mean, it’s like the various powers think that people LIKE delivering bad news / warnings to them. It’s only done as a service, and usually by the people who pull the short straw. No one likes ‘that guy’ who has to tell them to turn down the music, or the party will be shut down. I mean, has anyone seen anyone who has sounded the alarm profit from it? Now, what about their ‘friends’ who say that everything is well, are they profiting from this?

One by one, the guards are silenced. Their duty performed in vain, their sacrifice meaningless. Their only salve will be the cries of those who refused to listen, who silenced the critics, who played the con game.

It is obvious that this country, and many others, are running on auto-pilot. We only change direction when we encounter the ground or turbulence.

Nov 13, 2012 9:40am EST  --  Report as abuse
zotdoc wrote:

I wasted all those years in medical school and residency. At 61, there is no way I’ll retire with anywhere neart the benefits of a california police officer. I feel like calling my daughter in medical school and telling her to quit wasting her time and go to the police academy instead!

Nov 13, 2012 9:52am EST  --  Report as abuse
oldschool wrote:

It’s not just California. The same exact problem is bankrupting Illinois. Police and firemen are the ultimate sacred cows. A common scam here is for a fire chief to retire – at a relatively young age – and then move to another city and become a fire chief there. Thus collecting pension #1, salary #2, and qualifying for pension #2. You should see the homes some of these guys live in around here.

Nov 13, 2012 9:55am EST  --  Report as abuse
xit007 wrote:

Government is broken – financial accountability and budget discipline are ignored when the government has no stops to its spending. California cities lead the unemployment roles and bankruptcies. IF the place wasn’t so beautiful the wealthy would flee – as they see the coming debacle. The problem is they have investments – but California is already being bought by overseas interests because they can wait for the turnaround or the collapse. I am saddened for the hardship brought on these people by their leadership….

Nov 13, 2012 10:01am EST  --  Report as abuse
Cicero-CA wrote:

Two immediate ideas come to mind:
1. cap the maximum retirement amount to $70,000/year.
2. move the age a retiree can start to collect their annual retirement to age 65.

Nov 13, 2012 10:29am EST  --  Report as abuse
Overcast451 wrote:

The “one-party” state and it’s successes cannot easily be counted…

Elect more democrats California – the success just cannot be contained!

Nov 13, 2012 10:29am EST  --  Report as abuse
Jameson4Lunch wrote:

Great article. A glimpse into the microcosm that will be the macrocosm of the US’s downfall.

Nov 13, 2012 10:58am EST  --  Report as abuse
Flowerscent wrote:

Everyone wonders why I say that terms of office should be restricted and people held accountable for creating this kind of problem. As for the Police and Fire Dept.’s there is one solution which would be cut the pensions and get them into real amoounts or declare bankrupcy and fold the pension accounts. They were greedy and now if there is no money they lost. Who are they going to sue, the mayor and the reps then go ahead. The people are the poorest in the state.

Nov 13, 2012 12:28pm EST  --  Report as abuse
fred5407 wrote:

Yah know, I was just trying to explain this to some people two weeks ago on this forum but they were still in La La Land. I do not know where it will end. This kind of explains the Democrats way of operation in a state and city. I think even a lot of Republicans believe you can live beyond your means, borrow money to run a business, and if all else fails, declare bankruptcy. Remember, there is the Guy who built this place who keeps score.

Nov 13, 2012 12:38pm EST  --  Report as abuse
anarcurt wrote:

Someone needs to break the cop cabal. Their salaries are out of control all over the nation. There are more than enough people willing to work at half the amount these clowns make.

Nov 13, 2012 2:08pm EST  --  Report as abuse
soulkat wrote:

Unbelievable. I have an enginnering degree from the Ivy league and an MBA. I have had jobs where I have risked my health and safety; and after 25 years of full time work don’t even make 1/2 of what these guys do in retirement. I think that if you asked every worker in America, from CEO to maid, if they felt that they were compensated fairly for their efforts they would say – “No, I deserve more for my contribution.” It goes beyond greed. The situation reflects the incompetence of the council, mayor and town managers. You basically expect elected rotating “volunteers”, based on their compensation, to make million dollar decisions. To think that they are not influenced by the parties who stand to benefit from their decisions is ludicrous.

Nov 13, 2012 2:51pm EST  --  Report as abuse
gee.la wrote:

Small government is the remedy. The larger and more involved government intends to be more vicious and corruptible. After a big government consumes all resources, it collapses and only is a poor, damaged and bankrupted ruin left. Limiting the government’s power is the only way to save a city, a nation or this world.

Nov 13, 2012 3:23pm EST  --  Report as abuse
razor459 wrote:

Just for the record, California is America’s third largest state (by area but that is the typical meaning of largest)

Nov 13, 2012 3:24pm EST  --  Report as abuse
Poalima wrote:

This article is,obviously, very one-sided.
While it’s true that public pension costs are creating a terrible burden on some states and cities, the fault lies squarely with the public, and their reps.
The public, like the individuals that comprise it, likes to have today, but pay tomorrow. So, rather than offer competitive salaries now, they offer lower salaries with very sweet pensions. Well, “tomorrow” is here, folks.

Nov 13, 2012 3:36pm EST  --  Report as abuse
matthewslyman wrote:

Calpers scalpers! Outrageous.

Nov 13, 2012 3:37pm EST  --  Report as abuse
koskip wrote:

Hi everybody I am writing this from Greece. I really enjoyed the article and I am telling you this feels like home. A minority of well organized people with invested interests pass the laws that support them. Ordinary people need to pay more and more just to support this ‘democratic’ oligarchy. Keep up the good work. Pretty soon you will be exactly like Greece.
Sorry guys this is not the States I remember. I spent 2 years in your country quite a few years ago and I remember the Americans as hard-working and ethical people. People who were doing the right thing. This is the America I want to remember. Clean up this mess before it gets out of hand like it happened in Greece. The similarities are awesome.

Nov 13, 2012 4:44pm EST  --  Report as abuse

@ Stickystones
So when Republicans spent so much while cutting taxes in 2000-2008 it was clearly somehow different from what the Democrats are doing now right?

Nov 13, 2012 4:46pm EST  --  Report as abuse
edwult wrote:

Far from being heroes; the Police and Firemen sounds as if they are extortionists.

Nov 13, 2012 4:52pm EST  --  Report as abuse

The Council Members that received campaign contributions and political endorsements from the police and fire-fighter unions and that, in turn, gave them these deals were all registered Republicans. So, if you would like to look at the situation through a partisan lens, you should place the blame with the right political party.

Nov 13, 2012 5:32pm EST  --  Report as abuse

The City of San Bernardino is not “big government.” It just has very powerful police and fire-fighter unions that are willing and able to give more than $100,000 to individual office-seekers who then, when in office, return the favor and provide the police officers and fire fighters with exorbitant salaries and pension packages.

The problem is that, in San Bernardino, there are no other moneyed interests available to support opposing candidates who can fight against the current crop of crooks, which, with the exception of the City Attorney who has declined to state a party affiliation, are all registered Republicans, incidentally. Additionally, the campaign contributions that the unions provide are combined with political endorsements. So, the crooked politicians are able to present themselves as being “tough on crime” because a public-safety union endorsing one candidate and actively opposing the other carries significant political advantage.

Nov 13, 2012 5:55pm EST  --  Report as abuse
spaten2 wrote:

san bernardino is a sewer system and is in the process of a total collapse. only problem is there is no money to rebiuld the system so the city will be living in the dark ages for the foreseeable future.

Nov 13, 2012 5:56pm EST  --  Report as abuse
ZGHerm wrote:

This could be the motto of the times, “vicious cycle of self interest”.
And it is not only San Bernardino, not only California or the US but the whole global world.
And we still react with disbelief every time we unearth that people are inherently selfish, and only care about themselves.
As we read the stories about the latest scandal shaking the CIA and FBI people are “surprised” how can those heroes act this way, as if there were “super humans” like Presidents, Generals, or Religious figures who were above “inherently human”.
Inherently human means I can only think about myself, I cannot move a finger if it is not for my own benefit, if I cannot rise above others and exploit everything for myself.
Each and every human being works on the same program, we should stop reacting with surprise and disbelief. Until we do not realize and accept this as fact, we have no hope of solving the problems in San Bernardino, or the global crisis that is engulfing us much more severely than Hurricane Sandy.
The only solution for any of humanity’s problem is changing human nature by starting to work together, with mutual responsibility for the common good. Otherwise we will simply not survive.

Nov 13, 2012 6:30pm EST  --  Report as abuse
ZGHerm wrote:

This could be the motto of the times, “vicious cycle of self interest”.
And it is not only San Bernardino, not only California or the US but the whole global world.
And we still react with disbelief every time we unearth that people are inherently selfish, and only care about themselves.
As we read the stories about the latest scandal shaking the CIA and FBI people are “surprised” how can those heroes act this way, as if there were “super humans” like Presidents, Generals, or Religious figures who were above “inherently human”.
Inherently human means I can only think about myself, I cannot move a finger if it is not for my own benefit, if I cannot rise above others and exploit everything for myself.
Each and every human being works on the same program, we should stop reacting with surprise and disbelief. Until we do not realize and accept this as fact, we have no hope of solving the problems in San Bernardino, or the global crisis that is engulfing us much more severely than Hurricane Sandy.
The only solution for any of humanity’s problem is changing human nature by starting to work together, with mutual responsibility for the common good. Otherwise we will simply not survive.

Nov 13, 2012 6:30pm EST  --  Report as abuse
gooch_mango wrote:

It’s a nice scam these public servants have.

When the stock market was booming, they deserved better pensions.

When the housing bubble was inflating and the borrowed money was flowing, they got raises and bigger pensions.

And when their city hit the wall, well then they REALLY need more money ’cause their jobs just got harder.

So let me see if I got this straight: good times equals more money… bad times equals more money. Is there any time these noble servants deserve less?

Soon they will be introduced to the iron bitch named “math”. Good luck negotiating with her!

Nov 13, 2012 7:49pm EST  --  Report as abuse
olderbutwiser wrote:

People with hard private sector jobs commute distances and are away from 7 to 7. Polie/fire are around all day, schmoozing with elected officials who are mostly townie type mediocre lawyers trying to build a practice. Teachers are coaching your kids and giving references and are around all day and can make or break your kids with school/sports. These contrcts are negotiated in a vacuum and nobody knows until it too late. I see it in my town and all towns. If you speak or write letters to editor(as i have done)prepare to be harassed by police, fire, teachers and their families

Nov 13, 2012 10:06pm EST  --  Report as abuse
Robandrew wrote:

I agree with ZGHerm.

Nov 14, 2012 1:57am EST  --  Report as abuse
alphaMetanoia wrote:

As California goes so goes the rest of the country. We will see this happening at all levels of our Federated Republic, and with four more years of Obama the feds won’t be far behind.

Nov 14, 2012 11:54am EST  --  Report as abuse
StillnotGalt wrote:

You can’t expect to pay people $10,000 a month for life starting at 53, and not go bankrupt. That’s more than lottery winners get when they win a million dollar prize: the annuity payments given to lottery winners are much less than that.

Anybody really think that CA citizens should sacrifice services and sacrifice hard earned money in property taxes and sales taxes so that cops get over $2 million in 20 years?

It’s greed and graft, and every one of these overpensioned crooks is subhuman– willing to destroy their city and bathe in the people’s money.

Yes, I’m jealous. A lot of people work just as hard and have nothing but a 401K plan to survive on. A $1.2 million paid out to one jerk from age 53, to 63. It’s sickening.

Nov 14, 2012 2:17pm EST  --  Report as abuse
PKFA wrote:

We hear a lot from the Administration about the fat cats on Wall Street, what about these leeches? Oh, that’s right- union dollars. And is it a coincidence that those most troubled states are blue? Let’s see how our “four more years” go.

Nov 14, 2012 2:23pm EST  --  Report as abuse
StillnotGalt wrote:

Can anyone dispute the fact that the benefits that flow to these few significantly damage the ability of the private citizen to pay for his own retirement? It’s one thing to say, well, that guy has it better than me, quite another to say, that guy has it better than me, because I have it so much worse.

With wealth creation in the private sector, one company’s success lifts all boats: the growth of private wealth means more economy, more jobs, more money in the system. Microsoft’s millions didn’t sap the resources from others, it added to their wealth and ability to be efficient. Wealth. Growth. Giving.

But this public sector payout is truly a zero-sum game. They have money, because others have it taken from them. There’s no expansion, no growth, no wealth creation. There’s only money out of our private pockets and in their public “servant” pocket. It’s transfer. It’s taking. It’s looting.

Nov 14, 2012 2:47pm EST  --  Report as abuse
IBuiltThat wrote:

Public unions are like a cancer, as this article illustrates.

Nov 14, 2012 4:07pm EST  --  Report as abuse
Lucius wrote:

There is nothing good about this. The pensions must be cut and cut severely. Otherwise the burden of paying for the pensions will push tax rates through the roof — though I understand that Proposition 13 limits the amount to property tax increases. But if those were to rise dramatically so as to cover the pension costs, no one could afford to live in San Bernardino. Perhaps it will devolve into a “failed city” where the Mexican gangs will operate with impunity.

Nov 14, 2012 4:51pm EST  --  Report as abuse
CharleneSusan wrote:

This isnt new news. We all know this is what goes on. The Unions are the epitomy of hypocrisy. Fighting for the “common man” they are bankrupting anyone who isnt on their team.

Nov 14, 2012 5:23pm EST  --  Report as abuse
zefal wrote:

Curious. No party identities in article. Go look up and find it’s run by democrats. What a shock! Shocking also that Reuters didn’t think that worth mentioning! Bwahahahaha!

Looks like they need one of those “irresponsible” Republicans who will cut spending and not raise taxes, Uh?

Don’t feed the beast!!!

Nov 14, 2012 6:04pm EST  --  Report as abuse
SamlAdams wrote:

to paraphrase Mencken…the folks in California deserve the government they’ve elected and they deserve to get it good and hard…

Nov 14, 2012 6:28pm EST  --  Report as abuse
Dave_A wrote:

Simple solution:

It should be illegal to provide any non-public-safety public employee with a pension. 401(k)s for all, just like the same job would bring in the private sector.

They should also not be allowed to join or form unions. White collar employees do not do that, outside of government….

Nov 14, 2012 7:01pm EST  --  Report as abuse
thesafesrufer wrote:

Unions just sank the Hostess baking company today with their outrageous pension and lifetime medical demands.

Firefighters and police should be on 401k’s, Medicare, and Social Security just like the rest of us.

Nov 14, 2012 7:18pm EST  --  Report as abuse
shsp wrote:

Ordinary arithmetic is difficult for most people. Actuarial math is daunting. This story can be revisited across the Western world where life has been defined by entitlements to be paid for by a diminishing younger generation.

Nov 14, 2012 7:37pm EST  --  Report as abuse
AESmimi wrote:

You must live in another San Bernardino than I live in. Did you watch 60 minutes and Fox News when they ran the story on bankruptcy in California? All of those cities to include San Bernardino are run by Democrats. As is our bankrupt state government but nice try.

Nov 14, 2012 8:19pm EST  --  Report as abuse
MrtFUBO wrote:

@accidentalgood. the true conservatives that i know were bitching about bush’s overspending too, but you probably didn’t hear that.

Nov 14, 2012 8:39pm EST  --  Report as abuse
Skep41 wrote:

Gee, what word is completely missing from this article? It begins with a ‘D’ and ends with ‘emocrat’. The people of San Bernadino, like all good Californians, were voting to protect the noble polar bear, punish greedy businessmen, and ensure that those dastardly Christian maniacs dont take away their right to a free abortion should they need one. The left-wing journolism school grad crusading reporters would never deviate from the Party Line and actually report what was going on, just as the reporter in this article refuses to identify any of the culprits by a party label. The ignorant chumps in this moronic state think the party can go on forever but the day interest rates on bonds start rising the party is over.

Nov 14, 2012 9:02pm EST  --  Report as abuse
tess0926 wrote:

Welcome to hell here in California. This once beautiful State is full of corruption on the inside of wasted taxpayers dollars funding state employees enormous salaries, pensions and benefits. It’s all corruption and city by city debt and lack of jobs will have the final say that will create an economic collapse. Unions can’t get paid by the city there is just no money. This will happen across this State.

Notice that alot of employers left the city. This is happening all across California. They will continue to lose small businesses and jobs due to aggressive union and government power by the State. WE all must live within our means during good and bad times. But corruption is here as long as unions are allowed to be formed with public funds. Governor Brown allowed this years ago.

Nov 14, 2012 9:44pm EST  --  Report as abuse
eatingdogfood wrote:

Democrats + Unions = Bankruptcy!

Nov 14, 2012 10:19pm EST  --  Report as abuse
c2183rdcav wrote:

“Brown’s marquee initiatives is “realignment,” an effort to move…….services from state control to the cities and counties.”

HA, the unstated reason is that his state budget is not “reality” based….you will eventually see this at the federal level as the baby boomers, debt servicing and healthcare eat the entire budget. You will hear about “realighnmrnt” in education, transportation, et al. to the states!

Nov 14, 2012 11:55pm EST  --  Report as abuse
1911_a1 wrote:

Take a good look America! This is your future. The way of thinking that put the states of California, and Illinios in this position are the same way that the president that you just elected for four more years thinks. Once we become California, it won’t be long before we will eventually become Greece. I love this country, and it makes me sad to say goodbye, but that is the way we are going and I can feel that our better days are behind us. Learn some trauma medicine, how to hunt and live off of the land. When it’s all said and done, it will be the only way to survive. Stay in shape, When the health care system collapses it won’t take long for the people that depend on pills and hospitals for their lives, to die off. Good luck America!

Nov 14, 2012 11:58pm EST  --  Report as abuse
msa327 wrote:

I used to live in San Bdno and watched the city decay from 1980 on. I left in 85, seeing the writing on the wall. Any rational thinking person will agree with this article. There is absolutely ZERO chance the city would be bankrupt if the corrupt government had refused to go along with the public employee unions. All the pensions should be suspended and re-calculated since they have stopped CalPers pymts. Sadly another ZERO
chance! Take notice CA! With the results of the last election, this is your chosen future!

Nov 15, 2012 12:34am EST  --  Report as abuse

If this isn’t an organized crime racket I don’t know what is.

Nov 15, 2012 7:45am EST  --  Report as abuse
Bullitt wrote:

Sure glad I don’t live anywhere near that mexican infested hell hole.

Nov 15, 2012 1:13pm EST  --  Report as abuse
seeinred wrote:

It’s obvious the authors for Reuters never lived anywhere near the Inland Empire during the last 30 years.

What is sinking those cities are a combination of factors that have nothing to do with unions.

Some of the significant economic engines that drove that economy shut down and are never coming back. Two military bases that were in proximity to San Bernardino closed down. Norton AFB and a lot of the activity at March AFB was curtailed. Both of those installations employed a lot of people at middle class wages. GONE!!

The other economic engine was Kaiser Steel. Lots of good middle class blue collar jobs went with it.

But it’s much easier for intellectually lazy writers to blame unions.

Nov 15, 2012 3:31pm EST  --  Report as abuse
SayHey wrote:

An organized minority – public employees and their “managers” – simply raided the public treasury when the disparate public at large had no one looking out for them. Public employee unions simply do not work – it is not like the private sector where unions and companies, in effect, bargain over how to divide the profits – there is no such thing in government. In the private sector, it would be a crime, bribery, to give your boss money to obtain favorable benefits and compensation. Yet, that is routine (political contributions) in the public sector.

Nov 15, 2012 3:40pm EST  --  Report as abuse
Mike3545 wrote:

This is how you destroy a city. See if you can see any similarities

Nov 15, 2012 8:47pm EST  --  Report as abuse
TheNewWorld wrote:

“Unions poured money into city council elections, and the city council poured money into union pay and pensions. The California Public Employees’ Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.”

“In bankrupt San Bernardino, a third of the city’s 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.”

Ah yes, the most dangerous special interest group to a city, state, or federal government is the public sector unions. They should never be allowed to vote for anyone that can directly affect their pay.

Nov 15, 2012 9:08pm EST  --  Report as abuse
TheNewWorld wrote:

@CBSanBernardino

The Republicans were elected to try and clean up the Democrat mess that was left behind. This didn’t just happen over night. Nice spin though.

Nov 15, 2012 9:30pm EST  --  Report as abuse
Ralphooo wrote:

That is an astounding story, one which I’ve never heard before.

Nov 16, 2012 2:59pm EST  --  Report as abuse
seagreen wrote:

See any similarity between this and the country as a whole?

Nov 17, 2012 9:07am EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths manage enterprise.

Nov 17, 2012 6:20pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
phoenix2 wrote:

This is what happens when sociopaths run businesses.

Nov 17, 2012 6:31pm EST  --  Report as abuse
rocque wrote:

Remember that unions got angry at the Wisconsin Republicans who tried to rein them in.

Public unions ARE immoral and SHOULD all be illegal.

Police, teachers, and firemen are stealing from those who they should serve.

Nov 17, 2012 7:19pm EST  --  Report as abuse
Akers wrote:

Atlas Shrugged

Who is John Galt?

Nov 17, 2012 9:50pm EST  --  Report as abuse
sbfeibish wrote:

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury.”

― Alexis de Tocqueville
29 July 1805 – 16 April 1859

1859!!!!!!

Ray Dalio, the big hedge fund manager:

In the fourth stage, countries become poorer and still think of themselves as rich…debts rise relative to incomes until they can’t anymore. (All the savers who lived thru the hard times have died.)

In the last stage of the cycle they typically go through the deleveraging and relative decline, which they are slow to accept.

Nov 17, 2012 10:18pm EST  --  Report as abuse
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