San Francisco: Progressive Paradise or Bankrupt Banana Republic?

Great article in the SF Weekly on San Francisco:  The Worst Run Big City in the US.  The article is lengthy and packed full of government fail.  Just one example:

You can't get San Francisco running efficiently, because that would require large numbers of unionized city workers to willingly admit their redundancy and wastefulness. Inefficiency pays their salaries. "It's been going on for decades," Peskin says.

This problem comes up almost every time the city negotiates labor contracts, which is part of the reason San Francisco is constantly on the brink of fiscal ruin. Politically powerful unions "” the progressives are beholden to the service unions; moderates cater to police, firefighters, and building trades; and Republicans ... what's a Republican? "” negotiate contracts the city knows it can't afford. Politicians approve them, despite needing to balance the budget every year, because the budget impact of proposed contracts is examined by the Board of Supervisors only for the following year, no matter how long contracts run. According to former city controller Ed Harrington, it has become common practice not to schedule any raises for the first year of a contract, but to provide extensive raises in later years.

The result is a contract that looks affordable one year out, then blows up in the city's face. City employees receive up to 90 percent of their already generous salaries in pensions and many also receive lifetime health care "” meaning that as they retire, labor costs soar.

Sounds like the health care bill in Congress, no?  The bit near the beginning on the problem in the parks department - overstaffing, no one showing up for work, lost money, poor controls, no process - particularly resonate with me.  My business is the privatization of public parks.  I can't tell you how many public parks agencies I know to be providing terrible service (service levels that I would be ashamed of) with grossly inflated budgets tell me face-to-face that they can't privatize because that would jeopardize the quality of the parks.  Well, that and the fact that the public employees unions would not allow it.

I always laugh when folks tell me that government intervention is needed because private industry is too short term oriented.  But no one is more short term oriented than politicians looking to the next election or closing this year's budget hole.  In particular, capital maintenance is always ignored until infrastructure is literally falling apart.   We see it in parks, transit systems, roads, schools, etc.  It is the same phenomenon that causes third world state-run oil companies to have their production fall off - instead of reinvesting their profits into upgrades and maintenace of their fields and infrastructure (as those short-term focused American oil companies do) they transfer the money into social giveaways that cement their political power.  Here is a great example from San Francisco:

In 2002, the San Francisco Chronicle revealed that the city had, for decades, been siphoning nearly $700 million from its Hetch Hetchy water system into the San Francisco General Fund instead of maintaining the aging aqueduct. Several mayors and boards of supervisors used that money to fund pet causes, and the Public Utilities Commission didn't say no. Unfortunately, spending maintenance money elsewhere doesn't diminish the need for maintenance. By 2002, the water system was in such desperate condition that voters were asked to pass a $3.6 billion bond measure to make overdue fixes. Obligingly, they did "” who doesn't like water? Since then, the projected costs have swelled by $1 billion. So far.

My favorite line:

"San Francisco is Disneyland for adults, or a place people go until they grow up."


  1. morganovich:

    as one who lives in san francsico, i just want to say "yup, that's us all right."

    this article is, if anything, too charitable.

    it also leaves out all the fun new anti-business policies that are evolving. you should see what requiring all employers to pay a high minimum wage (that is not allowed to take tips into account) and provide healthcare for ALL workers has done to the price of a meal at our restaurants.

    $18 entrees are now $26. $26 entrees are now $38.

    the permitting structure is surreal. the building codes are insane. you have to do a water study to TAKE OUT a bathroom or make a full bath a half bath.

    you can now be fined for not seperating compost from trash. (though i've never heard of it being done)

    SF is a beautiful city with a superlative lifestyle, but man, you really have to hold your nose any time you hear the word "government".

    for a city this rich (72k median income)and with such outlandish real estate values (decent 2br in a good part of town is 7 figures) to be perpetually broke is unforgivable.

  2. Spots:

    right on, politicians are short-sighted. now answer the claim you yourself raise about business being short-sighted, and try to give some defense of your implication that business is more trustworthy with long-term interests.

  3. Jason:

    "San Francisco: Progressive Paradise or Bankrupt Banana Republic?"

    I wasn't aware the two were ever mutually exclusive.

  4. epobirs:


    It's really very simple. When a business screws up, it only affects itself and its customers. And those customers are free to go with the competition any time they like.

    With government, if they screw up, it gets EVERYBODY and there is nowhere else to go. They're the only game in town.

  5. David Y:

    We left SF in 2002. The city is not only a model for waste, but compulsion--citizens are forced to think, act and especially pay in ways determined by the city. My work keeps me in contact with many folks who still live there--and the intolerance and utter hatred the majority exhibit for anything remotely resembling freedom or conservatism is startling. The people there between the ages of 24 and 34 view it like a college campus--they stay for 4 years, then move when it's time to start a family. Hmmm. Come to think of it, it's run like a college campus. Beautiful place in many ways, but in hindsight better to visit than live there. Fantastic windsurfing though...

  6. Mesa Econoguy:

    Bankrupt liberal haven.

    The entire state.

  7. Ian Random:

    I'll never understand why liberals aren't holding up their bastions as models for everywhere else. Do they know something is wrong on some level? Or is it like Michigan, the decline is blamed on the private employers? Shouldn't liberal policies attract untold amounts of business, maybe with a side dish of light rail?

  8. David Y:

    Mesa Econoguy-
    The state appears that way to the outside world. I have no doubt that 80+ percent of the state by area is arguably extremely conservative--but the population centers of LA/Bay Area/Sac'to control the state's legislation. I'd like to carve these areas into a new state!
    Culturally, a huge portion of the Latino vote is conservative--but the Dems have somehow locked up the majority.

  9. David Y:

    And bankrupt Conservative/Libertarian nightmare. Again, the land of compulsion--oh, and expect vandalism if you put a conservative candidate's sign in your yard/on your car. The 'tolerant Left', as they say...

  10. roger the shrubber:

    i believe the eagles wrote the best epitaph for california: "call a place a paradise, kiss it goodbye." but my oh my, what a place it must have been right up to 1965 or so. take someone from the ted williams era: can you imagine how much fun it must have been to grow up in san diego in the '20's and '30's? a san diego with a population of (maybe) 50 or 60 thousand people? shoooot. god would have rented out heaven and lived in california.

    then the word got out, and it all went to hell in a coupla decades.

    they're working on idaho and montana now.

  11. spots:

    epobirs, you're right, it is simple. has a large corporation ever polluted the resources of non-customers? has a too-huge-to-fail multinational corp ever endangered the whole economy for the rest of us? i don't deny that government cannot control what it claims to control. but your bromide of an answer to my question about business is a little weak.

  12. GU:

    "but my oh my, what a place it must have been right up to 1965 or so."

    Yep, as someone who lives in CA now (but grew up elsewhere), I describe it as paradise lost.