Governments are Not Forever: The Coming Idiocracy

Think of Prichard, Alabama, as the preview of coming attractions. Mayor Ronald Davis, pictured at left, is the face of Prichard's government. Prichard's government is like many local governments across the US deep south and California, except perhaps a bit advanced in its progression toward a corrupt inability to meet its obligations.

the declining, little-known city of Prichard is now attracting the attention of bankruptcy lawyers, labor leaders, municipal credit analysts and local officials from across the country. They want to see if the situation in Prichard, like the continuing bankruptcy of Vallejo, Calif., ultimately creates a legal precedent on whether distressed cities can legally cut or reduce their pensions, and if so, how.

“Prichard is the future,” said Michael Aguirre, the former San Diego city attorney, who has called for San Diego to declare bankruptcy and restructure its own outsize pension obligations. “We’re all on the same conveyor belt. Prichard is just a little further down the road.”

...The city’s rapid decline began in the 1970s. The growth of other suburbs, white flight and then middle-class flight all took their tolls, and the city’s population shrank by 40 percent to about 27,000 today, from its peak of 45,000. As people left, the city’s tax base dwindled.

...The city had already taken the unusual step of reducing pension benefits by 8.5 percent for current retirees, after it declared bankruptcy in 1999, yielding to years of dwindling money, mismanagement and corruption. (A previous mayor was removed from office and found guilty of neglect of duty.) The city paid off its last creditors from the bankruptcy in 2007. But its current mayor, Ronald K. Davis, never complied with an order from the bankruptcy court to begin paying $16.5 million into the pension fund to reduce its shortfall.

A lawyer representing the city, R. Scott Williams, said that the city simply did not have the money. “The reality for Prichard is that if you took money to build the pension up, who’s going to pay the garbage man?” he asked. “Who’s going to pay to run the police department? Who’s going to pay the bill for the street lights? There’s only so much money to go around.”

Workers paid 5.5 percent of their salaries into the pension fund, and the city paid 10.5 percent. But the fund paid out more money than it took in, and by September 2009 there was no longer enough left in the fund to send out the $150,000 worth of monthly checks owed to the retirees. The city stopped paying its pensions. And no one stepped in to enforce the law.
_NYT

When the human capital of a municipality, state, or country is allowed to decay -- when unqualified people rise to positions of responsibility and power -- why should anyone be surprised when complex systems decay and collapse?

Across large parts of North America, Europe, and Oceania, human competence is being lost over time, and replaced by persons who are less than competent. Sometimes the explanation for a human system's failure lies in the corruption and lack of integrity of the system's leaders and operatives. In many cases it is not actually the fault of the persons placed in positions of responsibility -- it is the Peter Principle at work.

The problem is widespread and growing rapidly. If you have been unaware of the phenomenon, the wakeup call can be a bit of a shock.