- From the “Now We Know Who To Blame” Department: The news today brought word of the death of Norman Brinker. Never heard of him? Let me jog your memory. Ever gone to a restaurant and been greeted with “Hi, my name is Babs, and I’ll be your waiteress tonight.” Blame Norman. Ever visited a salad bar? Blame Norman. Ever dined at Chili’s, Macaroni Grill, Steak & Ale, On the Border, Maggiano’s Little Italy, or Bennigans? Blame Norman. Of course, all these restaurant ideas are in trouble in this economy.
- From the “Now What” Department: As we all know by now, GM has filed for bankruptcy, and its old shares are worthless. Well, not to some. And we all know who owns a lot of the newer shares: we (that is, the US Govt) does. Some think this is good, and some think it is bad. M’self, its done and I can’t change it, but I don’t think we should hold on to them for long. So I’ve got an idea: Next year, the IRS should offer these shares to taxpayers (as well as shares in other government owned things, like banks and insurance companies) in lieu of cash for their refunds. The shares could be valued as of the refund date, and would be distributed, commission free. This would allow the government to keep their cash, and would make everyone investors in the equity market (just like the Republican’s wanted with Social Security). Those with the shares would have a vested interest in the companies doing better, and might even earn a tidy nest egg (hell, for these special shares we could eliminate the capital gains on the first sale). It would also get the government out of the ownership game, which would likely be a good thing.
- From the “California, Here I Come” Department: We’re all hearing about the draconian cuts California is making… or not making. Yesterday, in a friends-only post, I explained why, but wanted to say something publically as well. A few days ago, I received our property tax reassessment for 2009-2010. The value of our house dropped again, per the assessor, over $118,000. This means lower property taxes for us, but now multiply our lower property taxes by hundreds of thousands of residents of the County of Los Angeles. The county, and the city by extension, have significantly lower revenues. Consider all the workers in the state who have lost their jobs, and now think of the lower income tax revenues… and the lower sales taxes as they cut back on expenditures. Now think about the financial problems of California: not only is there too much legislatively-mandated spending, but there has been a dramatic cut in income, just as if the state had lost its primary job. Just as homeowners faced with a sudden drop in income quickly face foreclosure and credit problems when the bills subsequently come due, the state is facing major credit problems that are coming due thanks to a spending pattern established when times were good, and the income was growing. In the face of all this, you can see why the leaders in Sacramento are having to make such dramatic cuts. They’re trying to save the house (state) by slashing expenditures, no matter how much it hurts the inhabitants, because the occupants of the house were unwilling to take additional measures to bring in income. They’re living in the mini-mansion they built when times were good, paying the inflated mortgage and HELOC bills, and praying. It is true we can’t grow our income enough to keep going as we were going (something many homeowners are learning). However, also as these homeowners have learned, just cutting your bills won’t pay the mortgage if enough isn’t coming in. One LA Times columnist has gone so far as to suggest cutting in a way that hurts the folks in Bel Air/Brentwood more than the folks in the lower income areas.
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