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Readings and musings

Austin Beutner and Mayor Riordan on Public Service

5/30/2011

2 Comments

 
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Austin Beutner, a well-known politician and arts philanthropist, spoke to our leadership and ethics class a couple weeks ago. The talk gave me an interesting perspective on how it's possible to turn around city government organizations and be entrepreneurial in the context of public service.

Beutner started his talk with his background and family information. His dad was a mechanical engineer, and Austin was taught from a young age to be serious about college and work while he was growing up. He remembers constantly washing dishes, cleaning printing presses, and driving delivery trucks for a florist.

He went to college at Dartmouth and moved to Wall Street in 1982. He was part of the Blackstone Group before beginning his work in government with the State department. He remembers visiting the mayor of St. Petersburg and learning that in the Soviet system, "profiting" literally meant taking advantage of someone. This was in large contrast to his own understanding of the concept, and he realized how likely miscommunication can be with different languages and social idioms at play. This also taught him the importance of always trying to listen.

After this experience, he started own firm that operated in various areas of finance. He did this until he got into a bad biking accident and decide to change careers. That's what got him to stay in the LA City public office. He felt passionate about changing the culture of how people worked in City Hall. He felt that all City employees should be public servants; the city's citizens should be their customers. (Instead, it's usually about enforcing and writing rules.)

He had three major initiatives while in office. First, he wanted to "do more with less bureaucracy." One example of this was "12 to 2": reducing the number of City departments one had to interact with to get a permit from 12 to 2.

His second initiative was learning from others (both for himself and for all his employees). All his employees had to do 5 cold calls per week to customers of the city (private sector employers). He personally talked to auto dealers, who are the #1 payer of sales tax and among the top 5 in aggregate payroll. They told him that they were having trouble finding entry level talent, and so he brought them together with community college leaders and started a dialogue about matching the two together.

His third initiative was reducing bureaucracy. He had the idea for a business tax holiday: a temporary pause on business tax to bring businesses back to LA. He called up some business school heads and professors to write papers and went on to announce the business tax holiday with Schwarzenegger thereafter. In addition, he worked to create local preferences for using LA vendors for the City.

The talk was interesting, and it was exciting to hear him tell us that he'll be running for mayor of LA.
2 Comments
carloblacksun
6/1/2011 11:01:15 am

A great speaker indeed.

However I am skeptical by nature, and I really wants to dig deeper whenever a politician promises to cut bureaucracy...

To me "a lot of bureaucracy" is often the consequence of a repeated moral hazard in a particular environment...

Thing about opening a restaurant: you need permits from the "food authority" (I don't know how it's called) that certifies that the food is stored properly according to safety rules... then you need another permits from the "construction authority" that certifies that the building is safe to sit a certain # of people...then you need somebody that certifies that the restrooms are ok, that the workforce is properly hired, that the financials of the new restaurants are ok, and so on and so on...

Let's assume that you can start the business as you get the "food permit"... then what happens if a fat old lady falls on the slippery tile floor while sitting on the toilet, breaks her leg and sues both the restaurant and the city which gave the permit to the restaurant? who wants to bear this cost?

Well, this argument may look weak, but let me give another couple...

1) If I am a restaurant owner since many years, someone who went through the long process of getting all the permits... will I be happy if my competitors will soon be able to launch their business easily, with no "bureaucratic entry barriers"? Think about Taxi Drivers who paid for their licences...

2) If I am an public employee that feeds his/her family thanks to this bureaucracy (that gives me a job), will I be happy if I get fired, or will I fight with all I can do to avoid this?

Both the actors here are voters...sure, some other people will benefit from the lower bureaucracy, but in proportion, their benefit will be lower than the loss of the long-time restaurant owner and the public employee, and for my memory, anytime a law proposal hurts badly the rights of few, giving a small benefit to a lot of people, the few are so much more passionate about the topic, that end up lobbying against the law proposal and ultimately stop it from becoming effective...

Reply
carloblacksun
6/1/2011 11:02:03 am

So my punchline is "it's a lot easier to cut bureaucracy on paper than in practice"...

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