Convergence by China and India

It is truly amazing how fast China and India are catching up with the rest of the world and how powerful the absolute size of China and India will be (maybe adding Brazil) relative to the rest of the world.  It is worth reading this interesting article in FT on this subject.

Suppose China were to follow Japan’s path during the 1950s and 1960s. Then it would still have 20 years of very fast growth in front of it, reaching some 70 per cent of US output per head by 2030. At that point, its economy would be a little less than three times as large as that of the US…and larger than that of the US and western Europe combined. India is further behind. At recent rates of growth, India’s economy would be about 80 per cent of that of the US by 2030, though its gross domestic product per head would still be less than a fifth of US levels.

China is today where Japan was in 1950, relative to US levels at that time. But its output per head is far higher in absolute terms, since US levels have themselves risen threefold. Today, China’s real GDP per head is roughly where Japan’s was in the mid-1960s and South Korea’s in the mid-1980s. India’s are where Japan was in the early 1950s and South Korea in the early 1970s.

via FT.com / Comment / Op-Ed Columnists – In the grip of a great convergence.

Candidates: Take No Help from Coral Gables Labor Unions

For there to be a reasonable and true renewal of city government in April, it is essential that candidates for mayor and city commission not accept money or material support from city labor unions.

Ask your favorite candidate if he/she is accepting support from firefighter, police or employee labor unions.

Any candidate who accepts labor union backing is surely a vote for higher property taxes in 2011.

Coral Gables Pensions: Information to Confuse

Thanks to Jackie Bueno Sousa for her succinct appraisal of Coral Gables’ annual financial coverup of the true financial disaster created by our commissioners and city managers. (Please see A CITY AGENDA page above for a few minimal changes in local government.)

Say that you’re among the few who bother to actually read the city’s annual financial report each year. You’d get all kinds of data about its pension program. Some of it is clearly outlined: the number of people receiving benefits, fund balances, contribution amounts and funding ratios.

Here’s what the report won’t tell you in plain, clear language: The city has been underfunding its pension plan for years. It now has an actuarial unfunded liability of more than $160 million.

Here’s what else it won’t tell you: Either major changes need to be made to the program or taxpayers probably will have to start kicking in more money — either by paying higher taxes or taking on more debt through bonds.

via A transparent government isn’t necessarily a direct one – Jackie Bueno Sousa – MiamiHerald.com.

Volsky on “Liz”, City’s Costliest Employee

LIZ HERNANDEZ CITY’S COSTLIEST EMPLOYEE

By George Volsky

 

City records – budgetary figures for the last decade –  indicate that  City Attorney Elizabeth Hernandez who is leaving City Hall December 31, 2010 to return to private law practice has been the most expensive employee heading the most expensive office that Coral Gables has ever had.

Since the beginning of the 1998-1999 Fiscal Year through September 30, 2010, the city’s legal office cost Coral Gables residents close to $7 million, of which she received about $2 million. Long-time analysts of the city’ wage structure, including retired top officials, regard those amounts as extraordinary high, especially since during about half of Hernandez’ city employment her office consisted only of her and one assistant, a knowledgeable, underpaid paralegal who did most of the work.

Hernandez relied on the paralegal’s expertise because, as several high city officials have noted there were legal issues she was unfamiliar with. In addition, it is known in City Hall that she used to be very often away from her office during working hours busy in extensive “social” activities, as Commissioner Chip Withers euphemistically called those absences at a recent city commission meeting.  According to City Hall officials, Hernandez had ample time for her extensive “social” outings because there were virtually no legal cases, sometimes involving simple court appearances or one-page letters, which she wouldn’t outsource to dozens of law firms or individual attorneys.

(There is a consensus in City Hall  that although Hernandez is supposed to strictly adhere to the law in all matters, regardless who might be affected by her rulings, “Loophole Liz” – the sobriquet she is referred often by countless city employees – she has essentially seen her job as being the defender of the commission, which had hired her, especially the mayor, and her friends in the administration, especially a few favored department directors.   Another unanimous opinion of city insiders is that had Hernandez not announced her departure from the city she would have been asked to leave. It was because finally there were three commission votes against her: Commissioner Maria Anderson, once her supporter but lately on the fence, had reportedly decided to join her colleagues William Kerdyk and Withers, who for a long time wanted the city attorney removed. )

The above-mentioned budgetary totals, even though they include Hernandez’ salary and her office’s expenses through Dec. 31, are assuredly much higher. It’s because documents pertaining to the period from the  Fiscal Year 1996-1997 – when Hernandez was hired – to FY 1998-1999 are not available at the Finance Department; they are said to be stored in a city repository and could be made accessible only at a very high cost for “labor and research.” That labor, under Hernandez was the task of IT, the Information Technology department which was supposed to enter that fiscal-legal information into the city’s data base but never did.

Still, had the 15-year expense of a city legal office would been only about $7 million, with the attorney making about $300,000 a year, some lawyers could persuasively argue that the cost wasn’t really excessive. (According to city records, In FY 2009-2010, Hernandez salary was $197,954; plus slightly more than 50 percent in benefits, she pocketed over $300,000. She is Coral Gables’ highest paid employee.)

But in addition to the $7 million that Coral Gables has paid for its legal office, in the city budgets there are expenditures of  close to $8 million which over the years Hernandez used to retain outside attorney, sometimes for minor legal work that the job description requires city attorney to perform.

Yet, the total of $15 million does not represent all the cost of the city’s legal expenses either. Analysts of city budgeting point out that since 2001 – coincidently the year when Don Slesnick became mayor – the city paid exactly $1,067,071 for what the budget calls “Judgments  and Damages.”  Again, that figure could be much higher because some payments for lost cases, among them for employees wrongfully fired – separations which had to have the city attorney’s imprimatur, do not seem to be included that category, part of the budgetary “Non-Departmental” expenditures, a large appropriation without explanation.  For example, in the 2007-2008 budget there is the “actual” expense of $381,606 for “Other Miscellaneous Expenses.”   No enumeration for the “actual” outlay was provided.

Also, apparently hidden somewhere in the past city budgets was the money  which Hernandez had spent at will, using her PC (Purchasing Card) often for what appeared purely personal expenses. Over the years, for example,  she has been paying for expensive lunches and other items that were very little or totally unrelated to Coral Gables business. On at least one occasion, she paid with her PC for wine consumed at lunch, which the city prohibits. That was confirmed by her lunch companion Robert Meyers, head of the Miami-Dade County Commission of Ethics and Public Trust. Before taking possession of their Purchasing Cards, city employees must sign a statement which prohibits them to pay for alcoholic beverages and personal expenses.

There are also indirect expenses born by city taxpayers as a result of Hernandez’ actions or inactions, part of the gallimaufry of personal and legal skeletons that repose in various city closets and which hopefully will come out to be reported soon.