Severe Threat to Silicon Valley

[Arthur Hanson]

Under the new tax bill California could see a snow ball effect that could literally destroy the state finances and severely damage Silicon Valley with it. With 769 billion public pension debt and growing fast and the state and local governments issuing bonds at an unsustainable rate, on top of every 100 private sector workers have to support 134 people collecting government checks it is a recipe for disaster. It wouldn't be as bad if it wasn't for the additional fact that most if not nearly all the government money is spent very inefficiently and ineffectively, with corruption at every step of the process. I have personally worked on many government projects and attended government board meetings as a private citizen and found the waste in not only the projects, but application is extreme. In all my years I found only one department at a University that was run efficiently and effectively. The sad part is there is enough money to accomplish our goals of a better life if we could cut down the waste, inefficiency, ineffectiveness and outright fraud. In this state we have government janitors that make over 250K in pay and benefits and that is just the tip of the iceberg.



Just as Silicon Valley has changed the world, I feel it has the power to change California and make it a model for good government for not only the US, but the world. The tech sector could bring efficiency and transparency to almost every government function. Silicon Valley has been the leader in reducing cost and increasing functionality and effectiveness of almost everything it touches. This is the greatest opportunity and challenge for the Tech Sector to make California a model for the world in good government that delivers increasing value and effectiveness at an ever lower price. It will require radical changes at unheard of speed for a government, but this is a challenge the Silicon Valley culture has dealt with and done in several areas and I believe can do it in this with California government and governments. This could set the stage for Silicon Valley to become a leader not only in tech, but everyday living in general. It will have to introduce a Darwinian approach to everything the government touches as it has done to itself. This alone gives it the reputation and record needed to start to make the dramatic changes California so desperately needs.

The link below provides the background needed to see the urgency of the challenge I know Silicon Valley can meet and conquer, making life better for all and setting an example of what can be done even in a dire situation. This is the opportunity for the Silicon Valley culture to show what can be done to almost every field of endeavor for now technology touches almost every single thing we or governments do and the depth of penetration of tech into literally everything is accelerating. The rewards or damage from this situation will affect not only Silicon Valley, but the world. If this is ignored, it will be at everyone's peril, for even Silicon Valley is not immune to economic storms that could damage an economic miracle it has created. This should also be viewed as an opportunity to expand the tech ecosystem for the benefit of all.

The link below provides a more detailed view of what lies before us and the nation. I have no doubt the challenge can be met and have many thoughts and seen examples of what actually can be done.

https://www.forbes.com/sites/baldwi...ole-states-in-the-trump-tax-era/#55ab45fbdd9b

ADDITION


The latest market crash is manifestation of bad financial processes by the government that border on outright fraud with many government programs having become Ponzi/pyramid schemes that will have severe repercussions for everyone. The transparency that the tech sector could provide a window on government negotiations where both sides sit on the same side of the table and accounting that is almost totally devoid of reality that is hard to face up to when we have been sold a fiction for so long. There is plenty of money, if we use it wisely, sadly we haven't. Full, true cost over the life of any spending should be made transparent before even instituted.​

 

[IanD]

"In this state we have government janitors that make over 250K in pay and benefits" -- sounds unbelievable, do you have hard evidence to back up this claim or is it anecdotal? (or from Fox News, or Breitbart, or Trump...)

 

[Portland]

It's from Forbes so you should go after them for hard evidence. The OP has a point about state finances and spending.

 

[Arthur Hanson]

Here it is, also many, many BART employees make a base pay and benefits in excess of 130k. Overtime is severely abused and has been for years. Google Washington hospital in Fremont where the administrator makes 7 figures. The list of pay abuses in California governments is legendary. Do a few google searches and you will be floored. An engineer friend of mine and I joke and it's really no joke, we would have been better off being Bart station agents doing a small fraction of the work we do and make about 130k base in pay and benefits. I have been personally abused by some for wanting the service they are paid to give, they didn't want to stop talking to their friends, reading or watching a video, about half do a good job and are conscientious, but still grossly over paid.

BART janitor grossed $270K in pay and benefits last year

Here's another link and don't forget to add substantial benefits that in many cases top 50k and many times over 100k before overtime.

California -- Public Employees Earn Six-Figure Salaries | National Review

 

[IanD]

Overtime being abused means what exactly? Management allowing people to work too much overtime? Normal (non-overtime) working hours being too short? Not enough staff to do the work so overtime is the only way to get it done? Overtime pay being too high compared to normal pay? The guy working too hard? Most of this isn't his fault, it's the BART management.

According to the data he worked 1400 hours on normal pay and 2500 hours on overtime which both sound wrong -- the first figure is not much over 6 hours per day (assuming a 5 day working week), the second figure is an extra 11 hours a day on the same assumption -- which is pretty unlikely, he wouldn't have been working 18 hours a day 5 days a week, so probably a lot of the overtime was at weekends. And if overtime means 1.5x or 2x normal pay (especially for weekends), that all adds up to a lot of money -- for which he did a lot of work. Why is this his fault? Isn't this what people are supposed to do in the hard-working go-getting USA?

Assuming he's actually doing the work not leaning on a broom smoking all day, the only way all this can happen is if BART don't have enough employees to do the work necessary, have to pay out big heaps of money on overtime as the only way to get the job done, and don't limit how much overtime people can do -- on the principle that if they want to do it they can, because otherwise they'd have to pay somebody else the same. Still not his fault, *if* he does work hard for all those hours -- if he slacks during normal hours just to get overtime to do the work he should have done, than that's different.

If the objection is that BART wages are too high anyway -- not impossible in a public organisation where nobody picks up the tab -- then this still isn't his fault, he's just working at a job that pays him well, which I believe is called "the market". You could blame BART management for paying too much (or the unions for making them), but this still isn't the guy's fault.

There was a similar newspaper-enraged furore in the UK years ago about a bricklayer earning a huge sum -- maybe 100k or so -- with all these people going on about how it was a disgrace that a lowly bricky should earn more than them (who were obviously much more intelligent). Turned out he was also not just working crazy hours but also shifting far more stuff per hour than anyone else because he was built like a brick sh*thouse, his employers were happy because he was doing something like 5x the normal daily work for 3x the normal money.

It's very likely that there are a lot of people who don't work hard, do abuse the overtime system, and have a cushy life as a result. I'm not convinced somebody working almost 4000 hours a year is one of them...

 

[Arthur Hanson]

The janitor was sleeping in a closet for extended periods. Overtime is literally made by massive feather bedding on a wide spread scale and inefficiency mandated by union rules where both negotiating parties sit on the same side of the table. If you had done extensive work in government facilities you would know first hand what you now consider unbelievable. Why do our schools rank 29th and our medical at 37th despite massive spending. Both are either in the government or highly government regulated. Spend some serious time in a government facility and you would know exactly what I mean. Some do a good job and don't abuse the system, but sadly most do to some extent and a significant percentage severely and this applies to gaming the pension system that is wide spread. Use google and check for yourself.

 

[IanD]

There's an obvious reason why US medical care is top in spending and close to bottom in results, and it's nothing to do with featherbedding or unions...

 

[Arthur Hanson]

There's an obvious reason why US medical care is top in spending and close to bottom in results, and it's nothing to do with featherbedding or unions...

It does have to do with unions and professional organizations that are essentially unions. These organizations in cooperation with government have set up systems, laws and regulations that have given us the medical mess we have and are a significant contributor to the problem. I have seen this first hand as a trouble shooting project manager. There are processes where by Indian doctors do up to eight operations in the time a US doctor completes one. The process is they stay in the operating room and do only surgery. Speed in surgery increases success and lowers infection rates for the body is opened up as long and someone who does eight times the number of procedures is going to have not only more speed, but a much higher skill level. The waste and inefficiency in hospitals is engrained at every step of the process from construction to delivering care. This is not only my opinion, but the opinion of an award winning industrial engineer who worked in the industry and found waste and inefficiency engrained in a very rigid culture. I have found this when I suggested procedures proven abroad on a large scale and been told we can't do that here.

 

[IanD]

Sorry Arthur but I don't agree -- the reason that the US has such high costs and poor outcomes is that the whole system is driven by money and insurance, and it's in the interests of everyone involved (except the patients) to keep the cost high because they make more money, and to treat rich patients and throw poor ones in the trash for the same reason -- their purpose is not provide the best care for the least money, but to make the most profit.

Drugs prices and surgery (and residential bed) costs are *ridiculously* high in the US compared to almost anywhere else because there's no country-wide authority whose job it is to drive them down, everything is negotiated locally, and everyone has their snouts in the trough -- insurance companies, drugs companies, equipment suppliers, companies who build/lease hospitals, unions who put crazy restrictions on who can do what, lawyers responsible for the litigation avalanche, doctors who do expensive or defensive procedures just to reduce the risk of being sued.

Everywhere in the world has people who don't work as hard as they could -- and unions, and administrators who don't know what they're doing -- but only the US has such a toxic cocktail of a health system solely driven by how to make money out of sick people. Other first-world countries have a wide spectrum of health services ranging from completely socialised to almost completely privatised, but they all seem to be able to provide a better outcome than the US while spending less money.

The simple fact is that health is one area where the unrestricted profit-driven free market just doesn't work, and the US is the proof.

 

[Arthur Hanson]

The US government is the largest purchaser of medical and in this area corruption rules and unions and professional organizations play a significant part, as does the laws the government itself created. It's a free for all with almost no protection for the private patient. Congress and most government employees are insulated from this by excellent medical at low cost and have little skin in the game to solve the problem. The bottom line is the government has set the ground rules largely on the basis of contributions from many sources involved. To bad there isn't a patients lobby. If you count so called campaign contributions and revolving door jobs the US sadly has become very corrupt in percentage and absolute terms.

 

[Tanj]

To put it in perspective, the difference in USA healthcare benchmarked against 1st world economies with better health outcomes is about a 1.3 trillion dollar waste (7% of GDP) - larger than the entire US Federal discretionary budget. Fixing health care would be a value to our economy dwarfing tax reform. And you can't blame the government for the waste because the waste dwarfs the government. The waste is about 2x the size of the entire military budget.

 

[Tanj]

The "Soak Me" ratio should include the net amount of Federal funds transferred into the state. As the table stands, it mostly reflects which states have rich people. But the states without rich people are soaking the rich at large, too. Alabama takes in about $6,900 per capita sourced from the rich states.

The difference between somewhere like CA and AL is that in CA the state can envisage generous benefits (and corruption and waste) because it is swimming in money. AL politicians would probably do that too, if they could.

As we continue into a future with more and more concentration of production around capital, which is to say the 1%, the question of how to fund society in a healthy way is becoming more urgent. Yesterday's answers - both left and right - are not going to work. They are based upon a false picture of how the economy will work. Like this solar business - if you go look at the USA business that instigated the trade barrier, they are almost entirely automated. That is the future - lots of material goods which make sense, not many humans needed to make them.