Libraries provide free resources for young and old, rich and poor, employed and unemployed, insured and insured, Democrat and Republican – all of whom can use their learning to benefit themselves, develop skills and find jobs, create businesses, and contribute to civic life.

Why are we spending so much money on prison doctors who aren’t even working? News like this appears day after day (thanks, by the way, to the LA Times for making such revelations a priority). Why do state legislators insist the state needs to raise taxes, and why did they propose cutting state library funding almost to nothing, when there is so much inefficiency in the system?

While turmoil and short-term thinking continues at the state level, shouldn’t municipalities do everything they can to preserve libraries, which provide clear benefits to all segments of society?

Yesterday, at the end of a long day of civic meetings, Friends of the Glendale Library President John Steele, and Community Events Chair Leon Mayer both addressed Glendale City Council and asked them to reconsider surveying city residents to see if they would support a parcel tax for local library services (the city council voted 3-2 against a survey two weeks prior).

Steele said, “I think the electorate can be trusted to make a good decision in this matter…I recommend the council reconsider and approve a survey.” Mayer spoke later, urging, “Support the request by the Library Director to spend privately-donated money to conduct a survey to see if there is support for a parcel tax.”

Library Director Cindy Cleary submitted a Library Tax Assessment Survey Proposal to city council two weeks ago. The report shows that Glendale’s budget for its libraries is already lower than those of neighboring cities.

Among key issues discussed by top transportation leaders and elected officials, with keynote address by former Pennsylvania Governor Ed Rendell, was passage of a long-term federal transportation bill that would give counties flexibility to use innovative financing methods and streamline project delivery.

Villaraigosa stressed the 30/10 initiative, while Rendell stressed that America’s infrastructure needs to be maintained and upgraded in order to keep this country competitive. Villaraigosa’s press conference and comments foreshadowed President Obama’s address to Congress tonight.

More news and views on the summit in days ahead.

Morgenson will discuss her new book Reckless Endangerment at tomorrow morning’s Drucker Business Forum, held at the Crawford Family Forum, KPCC, in Pasadena. Check the Drucker Business Forum website to register. Breakfast begins at 7:45 a.m.; the morning program begins at 8:30 a.m.

Sunroom Desk recommends:

YouTube: Fear the Boom and Bust and Fight of the Century: Keynes vs. Hayek Round 2, featuring the famous economists in hilarious rap music videos debating the causes of the Great Depression and Great Recession, and advocating for their preferred cures. The works feature subtle political satire, key quotes from both men, and clear expositions. EconStoriesTV, a collaboration between George Mason University’s economics department and Emergent Order, should get a YouTube Oscar for its innovative and professional work.

Netflix: Inside Job, which clearly explains the causes of the 2008 crash and features beautiful shots of the Manhattan skyline, simple graphics demonstrating how CDOs proliferated, and interviews with international leaders. This got on my Netflix queue after it won this year’s Oscar for Best Documentary. Toward the end of the film, people at the apex of professional achievement stutter, trip over their words, or get mad when they are asked direct questions about the root causes of the crisis and their own culpability.

InterLibrary Loan: The Road to Serfdom, F.A. Hayek’s classic on the dangers of increasing government control over the economy. Hayek warned that totalitarianism was the inevitable result of too much government control or “central planning.” His book was a best-seller in the 1940s and returned to take the #1 place in Amazon sales last year. That’s when I decided to request it (electronically) through the Glendale Public Library’s InterLibrary loan system. I was #12 in the hold queue; I finally reached the top of the list three weeks ago. After reading it, I figured others might be waiting, and I was right: the online hold queue showed ten requests a few days ago.

Kindle: 23 Things They Don’t Tell You About Capitalism. Each “thing” made sense and confirmed the lessons of all works above, but the accompanying expositions were sometimes confusing. The 23rd “thing” is “Good economic policy does not require good economists”! Earlier in the book, author Ha-Joon Chang explains that most “good economists” didn’t anticipate the 2008 crash. He also exposes their lame excuses, including one sent in an official letter to Queen Elizabeth II, and concludes “Over the last three decades, economists played an important role in creating the conditions of the 2008 crisis…Economics, as it has been practiced in the last three decades, has been positively harmful for most people.”

Two Views of Hindsight
Financial Crisis Inquiry Commission’s 10 Major Findings, January 27 on The Huffington Post, stresses the findings that the crisis could have been avoided; and that poor regulation, excessive borrowing, risky investments, lack of transparency, breakdowns in accountability and ethics, poor lending standards, and overheated speculation in derivatives were to blame.

Culprits from Beltway Casting, a January 28 Wall Street Journal editorial, implies that the commission decided on its villains (bankers) before the study commenced, and asks why more blame isn’t assigned to federal policies and the operations of Fannie Mae and Freddie Mac.

For those still interested in deciding for themselves: hearings and testimony on which the final report was based are available online at this link. I saw the Financial Crisis Inquiry Commission Report on a Barnes & Noble table of business titles at The Americana this past weekend. It has larger dimensions than a typical paperback, small type, and small margins that make its 662 pages daunting reading and the entire book a hefty paperweight itself.

Looking Forward
While Quinlan fielded a question about the report (his take was that all actors, from individual loan applicants, to mortgage processors, to Wall Street, regulators, and politicians, could share the blame), his focus was how America could regain its economic footing in the wake of the financial crisis.

The U.S. is still the world leader in intellectual capital, Quinlan observed, and its economy has been kinder to college graduates while offering the world’s best rewards for intellectual innovation and entrepreneurship. At the basic level, he says, the U.S. needs to produce far more math- and science-proficient high school graduates prepared to become technically-skilled workers. The average high school graduation rate in the U.S. is about 70 percent, while in many inner cities it is far lower. In contrast, the graduation rate in Seoul, Korea is 98 percent. Quinlan also observed that the financial crisis has made it even clearer that current investments – in overseas military operations, and domestic health care and social safety nets – are drawing vital resources down and reducing our investment in education.

Quinlan said the U.S. shouldn’t concentrate on physical exports as a measure of economic competitiveness, but should promote overall commercial business overseas. When asked about market-based approaches to developing green and low-carbon energy alternatives, Quinlan answered that we “aren’t there yet” and that government incentives would have to play a role in the transition to sustainable energy technologies. He also offered some interesting suggestions for U.S. – China cooperation in managing the flow of oil from the Middle East.

Those attending heard fascinating insights on the state of the world today, investments in developing countries, and possibilities for regional economic collaboration and growth.

On the first theme: In Huffington’s new book, Third World America, she issues a wake-up call and blames Wall Street for “shorting the middle class.” She also echoes some of the accusations and recommendations in The Road From Ruin (author Matthew Bishop also spoke at the Drucker Forum earlier this year – Sunroom Desk published a four-part review of his book).

On the second theme: Seth Godin, author of Linchpin and another dozen best-sellers on business success, attracted a full crowd to the Colburn School’s Zipper Hall on November 9 to discuss his views on “the industrial revolution of our time.” Godin stressed that everyone must become a marketer, and that the internet revolution is not about leveraging capital but leveraging ideas and connections. He observed that gatekeeping as a business success strategy is a losing proposition, while making connections with clients and customers is an imperative.

Larry Kramer, founder of MarketWatch, discussed his new book C-Scape on November 17 at KPCC. Kramer created a successful financial news site, took it public, managed it successfully through the dotcom crash, and eventually sold it to Dow Jones. His observations tracked Godin’s: Every company now has to be a media company, content is the key to success, successful media sites need to do a great job curating the news for readers, and the convergence of these trends are forcing changes in business models that favor the consumer.

Officials in Glendale and elsewhere are using various means to address deficits caused by falling revenues, rising benefit and pension obligations, and other unanticipated problems (why were they unanticipated?). Last week, council members in Glendale imposed a compensation contract on city employees. Tonight they will vote on a water rate hike the News-Press calls “unpopular.”

In letters published in yesterday’s Glendale News-Press, Harry Zavos questions GWP’s investment in smart meters while basic infrastructure is in disrepair, while Bob Getts urges the city council to stop GWP transfers to the general fund. Did the promise of federal stimulus funds tempt Glendale to incur unnecessary costs at this time to install controversial new technology? Do GWP water revenues need to be transferred to cover increased employee benefit and pension costs?

City councils in Glendale and the city of Sierra Madre will both vote tonight on water rate increases. In Sierra Madre, the issue is keeping up with payments on a municipal water bond, and there as here, the rate proposal is unpopular.

Employees’ union president Craig Hinkley: “I hope the state passes a law that says that every upper level manager and their staff has to resign for one day, and take that Second Tier, because if its good enough for the workers in your city who deliver the services to your citizens, it ought to be good enough for them.”

Comments from City Manager Jim Starbird: “We need to address the pension issue from a structural standpoint…It is going to be too costly and we can’t support those costs given our revenue structure. We are looking forward this year to a 4 to 5 percent increase in both our safety and nonsafety retirement costs, a $4-$5 million cost in our general fund.”

City council member Laura Friedman: “As much as you all deserve the pensions you get, the public pension system was never set up to create a different class of residents than the people the public sector serves…We are doing the best we can to preserve what you have, but we can’t do it at the expense of the residents you serve, and that’s the position we’re in right now.”

Speakers, city staff, and city council comments can be viewed on the video archive (begin at 2 hours, 10 minutes).

Every taxpaying citizen, including the hard-working employees of the city of Glendale, should enjoy retirement security and health care that doesn’t deplete their savings, but the politicians who guaranteed these benefits to public sector workers got things backwards. Taxpayers should be first in line to receive services and benefits, and shouldn’t foot the bill for benefits they can’t receive themselves.

More on public sector benefits and pensions under the Sunroom Desk Paperweight:

Employees’ contract looks like a fair shake, Glendale News-Press, Saturday, November 6, 2010

Pension Tsumani – daily links to articles and posts on “the approaching wave of pension debt”

Schiff spoke at a Small Business Assistance/Career Opportunity Fair he sponsored at the Pasadena Convention Center. Exhibitors included federal agencies, local chambers of commerce, and LA County offices. The LA County Business Loan Program was promoting HUD and SBA loans it traditionally offers (these are not stimulus funds) from $25K to $1 million, available to businesses turned down by private banks.


Glendale-based Verdugo Workforce Investment Board representatives were busy at their exhibit table. The event was well-attended, and breakout sessions offered tips on starting a business, developing an effective resume, gaining access to private-sector caital and financing, and keeping a business going in tough times.

Most board members admitted they weren’t equipped to step in and raise funds in this very difficult environment. This is more bad news for their organizations.

After rounds of cost-cutting, many organizations are laying off staff, scaling back programs, and reevaluating management. The board of Eagle Rock-based We Tell Stories, which gets the majority of its funding from the LA County Arts Commission, just laid off key staff and decided to wait out the downturn.

Glendale nonprofits are suffering as well, and local management problems can’t escape notice in this environment. New Horizons was criticized in a federal report for construction delays involving stimulus funds, while the Glendale YWCA started a controversy by terminating its director.