In the name of "responsible banking", LA City Councilman Richard Alarcon is proposing that the city break off its financial relationships with major banks and rate future investment agencies based on their assistance and outreach to local communities.
Once again, government is attempting to manipulate market practice, not so much to improve the suffering economy, but to score votes with fickle demonstrators attacking feckless institution as the cause of the economic malaise that has slowed this country down.
Besides the legal requirement that cities invest their funds in banks, a more stable investment yielding higher interest, LA City cannot go about playing favorites with local institutions following hazy attempts to evaluate the long-term efficacy of new and limited financial partnerships.
"Responsible banking" begins with responsible budgeting, a goal that the LA City Council has failed to fulfill time and again. The naked attempt by councilmembers to appeal to the fragile and freakish masses exposes the naive and unserious approach of this local government to tackle its long-term fiscal problems with a mind toward resolving for the unforeseen future.
Instead of blaming the banks, a much-needed public utility, the LA City Council must invest their time in cutting spending; severely limiting future outlays into outlandish and unsustainable promises to public employees and greedy constituents; and above all lowering the tax and fee burden on city residents, already struggling to make ends meet without having to contend with greater and more costly government regulation.