Category: Economy

Assembly Bill 1482 a.k.a. Tenant Protection Act of 2019 has gained traction as is worked its way thru the “Bill Mill.” It would impose a statewide rent control scheme for all of California. It has passed both the Assembly and Senate and is back in the Assembly to reconcile Senate amendments. Final passage could be as early as tomorrow. Its next stop is the Governor’s desk.

It has received the blessing of many outside groups including the California Business Roundtable.

The CBRT is touting its support with statements like:

AB 1482 will provide certainty to tenants.
AB 1482 will keep families in their homes by tying caps on annual rent increases to the regional consumer price index (CPI) plus 5%, implementing California’s first-ever statewide rent control.

AB 1482 will encourage new homebuilding.
AB 1482 will also provide certainty to developers by exempting new construction for the first 15 years. This rolling exemption will address the acute supply shortage by encouraging developers to build more critically needed housing, while also ensuring we are adding new units under rent control protections.

AB 1482 will protect tenants in California.
AB 1482 will enhance safeguards for tenants statewide by ensuring they receive a 60-day eviction notice and a 1-month relocation fee if they are evicted after the first 12 months of a lease.

AB 1482 will prevent rent gouging.
AB 1482’s statewide rent cap applies to all multi-family housing over 15 years old covering more than 95% of all multi-family housing units, and all single-family homes that are corporately owned, ensuring landlords cannot take advantage of tenants through rent gouging.

Source: Tell your legislator to vote yes on AB 1482

I find myself in agreement with former CRA member and political curmudgeon Steve Frank who wrote recently:

This is another example of the business community deciding to “compromise” with a totalitarian State. The California Business roundtable formed by the California Chamber of Commerce has AGREED to the first step of government take over of housing. In AB 1482 it allows the State to set the rules and caps on rent increases. While this bill sets the limit at 7% a year, nothing stops government from making it 2% next year. It is the slippery slope to the State OWNERSHIP of housing—and those who claim to love freedom have given up the fight.

Exemptions today, can be ended tomorrow—by legislation or an activist court—and these folks claiming to represent capitalism have instead supported socialism. Of course, most of the Chamber folks donated to the Democrats.
There is an old saying that fits this situation: “An appeaser is someone that feeds his friends to the alligators, hoping they eat him last.” The alligators just killed off the Roundtable—the Chamber is next.

California Business Roundtable Moves In Support of AB 1482 (Chiu) –Opposes Private Property Rights

This is a huge power grab by the State and way outside the legitimate boundaries of a lawful government. Sadly, this act of tyranny will be met with hardly a whisper of opposition. We don’t normally talk this way but the truth is that in the final analysis, it’s all the king’s land, we are but the humble vassals. If you really owned your property then the government couldn’t take it away. Both rent control and property taxes are based on the premise that you don’t really own anything tangible.

In my mind, I keep harkening back to the story of H.L. Richardson recounting a conversation with Democrats in a back room of the State Capitol many decades ago. When asked about why the Democrat felt he had the right to tax something, he responded with the quip, “But look what we let them keep.” Translation, the Democrats think they are entitled to all that you have, but only take what they need at any particular time. Please note that this redistribution of your stuff only works in one direction.

The only lingering question is will supporters of the ballot initiative to impose statewide rent control pull their initiative when Governor Newsom signs this legislation?

I keep telling people that the debt obligations of our country including all the big ones like Social Security, Medicare, Federal Deficit, State, County & Local pensions, etc. are more than all the wealth on the planet but even I was surprised when I saw the latest calculation. You see, some enterprising folks on Wall Street ran the numbers and the story was published yesterday. Instead of being the lead story for the whole week, it was on Drudge for a few hours and then was bumped to the recycle bin.

If you thought politicians spend like drunken sailors, I can assure you that the boys in Crackerjack Uniforms only spend their own money, not that of your great grandchildren, yet to be born.

Real US debt levels could be 2,000% of economy, a Wall Street report suggests

Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level.

AB Bernstein came up with the calculation — 1,832%, to be exact — by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions.

Putting all that together paints a daunting picture but one that requires nuance to understand. Paramount is realizing that not all of the debt obligations are set in stone, and it’s important to know where the leeway is, particularly in the government programs that can be changed either by legislation or accounting.

The article then goes on to say that we shouldn’t worry because we can afford the payment on the credit card.

The key is not always gross dollar amount but rather ability to pay.

I hope Dave Ramsey blows a gasket when he reads this. I can picture him saying, “The borrower is the slave of the lender.”

“Globally, we have become over-reliant on borrowing as a solution for everything. Political excuses abound for why it doesn’t matter, which just clearly isn’t the case,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan committee of legislators, business leaders and economists that counts former Federal Reserve Chairs Paul Volcker and Janet Yellen among its members.

“We are quickly approaching a situation where we have dug ourselves a debt hole which is doing going to have profoundly negative effects on the economy for probably decades going forward,” MacGuineas added.

I corrected typo in the above quote–editor

The article concludes with this wishful thinking:

“First, you start having politicians level with voters instead of promising freebies. Second, you recognize that the time to do that is when your economy is strong,” she said. “When people were arguing for more borrowing they should have been doing the reverse. We’re still not in recession. It’s time to put in long-term strategies.”

Folks, we have hundreds of trillions of dollars in debt obligations and yet we go merrily along thinking as long as the sun rises that everything will be OK. Remember my opening, we owe more money than all the wealth created on the planet. Someday this merry-go-round of debt will stop and then who will pay the Reaper? The emperor has no clothes and as long as we all agree then everything is OK, right?

By Johnnie Does

Greetings folks, I’m taking a break from food reviews as my sodium content has put me almost into “Johnnie Does the ER” levels. So we wanted to report on a conversation with the naïve we had over the past couple weeks with our old friend 90-Day Calendar Guy.

Here are the conversations and my commentary.

The Togo’s experience: So 90-Day Calendar Guy comes into the office and is raging like a great ball of fire, claiming “have you been to a Togo’s lately?” I responded, “negative.” Apparently, he was craving a hot pastrami so he went to Togo’s and was in stunned disbelief that the sandwich was $12. I’m assuming he ordered the large. He complained about how they had to “microwave” the meat and it was a long wait for the sandwich. He remarked, “Only 2 people were working and it was lunch time!” and again he lamented the price. So he said he only ate the meat and threw the sandwich away and walked off in disgust, writing a bad Yelp review to boot. All afternoon he remarked 8 years ago it was $6!

Johnnie Does: Here is the problem with this; he, like usual, overlooks reality as he lives in fantasy land. Where to start? Ok, first you cannot really have hot pastrami sitting in a bin as health department laws make it so you have to throw it out if it’s left out too long. Frankly I prefer them making it fresh as opposed to scooping it out of a vat. I’ve never heard anyone complain of them making it to order (i.e. fresh) but I guess it’s a 90-day thing where profit is above all else? In addition, I’m more grossed out by the extreme amount of grease in the bin they “cook” the pastrami in, but to each his own.

Now on to the comments about pricing and hired help, this sums up his true naïveté. In regard to price, maybe pay attention to the minimum wage…its $11 an hour here. In regard to hired help, well it makes no sense to have extra people standing around twiddling their thumbs at $11 an hour. Service may be a buzz word, but profit is the bottom line and you may need to sacrifice service to make a couple bucks more. The bad Yelp review? No one cares dude. You have already proven your Yelp reviews are pointless as you lit up Red Robin yet visited them again a week later. Get a clue dude!

Amazon is ripping off USPS: 90-Day Calendar Guy ordered something from Amazon.com and when it showed up, it was a pair of shorts inside a USPS bag, inside another USPS bag, inside another USPS bag, inside a USPS box. He said you cannot trust the government to do anything! Saying someone paid for these bags and the USPS lost money. He proudly proclaimed USPS is being ripped off by Amazon, and he told everyone within earshot. Imagine if this guy was a professor, what original thoughts he has.

Johnnie Does: USPS gets ripped off by everyone, it undercharges and over promises. Why do they deliver on Sundays for Amazon only? At a subsidized rate to boot? This has been going on for years, it’s not new. In addition, 90-Day Calendar Guy watches more TV in a week…oh, and cable TV to boot, than I consume in a month. My point being, of all the people that should know about President Trump calling this out 2 years ago, it should be you.

Yet you claim it’s an original idea? You claim to be a bigger Trump supporter than anyone, yet you miss something like this? Maybe it’s because Sean Hannity hasn’t reported on it yet. Trump has been calling out people/corporations ripping off the taxpayers for the longest time, just now you are catching on?

In short, he has turned into a hot take machine, the world has passed him by but he is too scared to admit it. A hamburger used to cost $.25, but how much were the workers making? What was the cost of ingredients? I happen to enjoy Togo’s hot pastrami, but I haven’t had one in a while, too pricey, low quality. My advice…too bad it will never be heeded, cancel cable, go to reputable websites for news. Cable/TV is poison, it inhibits your ability to think clearly.

Johnnie Does

BTW we have exciting series about who has the best chicken sandwich coming soon, and we are officially reviewing the salsa bar Monday! That little minx better be ready.

What do you get when you cross an Ikea display, a tiny house, and the private sector?

That’s the proposal from new startup Rent the Backyard. The company is tackling rising home prices in the San Francisco-Bay Area by building backyard studio apartments, and splitting the rental profits with homeowners.

“This is a long-term partnership that we have with the homeowner,” Rent the Backyard Co-Founder Brain Bakerman told Yahoo Finance during a recent interview.

Homeowners can make $10,000 to $20,000 in additional income each year, according to the company.

Startup’s answer for high-priced Silicon Valley housing: Homes in backyards

So what is the sales pitch?

• We build your unit for free
• We list your unit online
• You get half the rent

If, you own a home in the Bay Area, have a 30 x 30 area, and you live in your home most of the time, then you could take part in this experiment in affordable housing.

Model homes are found on Internet here.

In recent years, math has become a weapon of social and political warfare. Often it is abused to promote junk science like the myth of global cooling, warming, err…climate change or whatever the hell they’re claiming this week. Numerical manipulation is also used as a tool to find new and creative reasons to get more grant money pumped into academia.

68 Percent Error

Here’s an example. Did you know that 68 percent of the universe does not exist and never did?

Remember “Dark Matter”? In 1998, scientists invented it to explain observations made by the Hubble telescope. Supposedly, 68 percent of our universe is made of it. “We are much more certain what dark matter is not than we are what it is.” — NASA

Yes, it’s still the gospel if you look on the NASA website, but there’s no such thing. Two years ago, a study was published that proved it is a false theory but it is still taught as true in schools all over the world.

Scientists believe that enigmatic dark energy make up 68% of the universe. But according to a Hungarian-American team, it may not exist at all. The team publish their results in a paper in Monthly Notices of the Royal Astronomical Society. The researchers believe that standard models of the universe fail to take account of its changing structure, but that once this is done the need for dark energy disappears.

Dark matter is now thought to make up 27% of the content of universe (in contrast ‘ordinary’ matter amounts to only 5%). After observing the explosions called as Ia supernovae, scientists concluded that dark energy, made up 68% of the cosmos, and is responsible for expansion of the universe.

In the new work, the researchers, officially led by PhD student Gábor Rácz of Eötvös Loránd University in Hungary, explained that models of cosmology particularly rely on approximations that ignore its structure, and where matter is assumed to have a uniform density. They questioned the conventional concept of existence of dark energy and suggest an alternative explanation.

Dr László Dobos, co-author of the paper, and currently working at Eötvös Loránd University, explains: “Einstein’s equations of general relativity that describe the expansion of the universe are so complex mathematically that for a hundred years no solutions accounting for the effect of cosmic structures have been found. We know from very precise supernova observations that the universe is accelerating, but at the same time we rely on coarse approximations to Einstein’s equations which may introduce serious side-effects, such as the need for dark energy, in the models designed to fit the observational data.”

New Study Suggests 68 Percent Of The Universe May Not Actually Exist

If you keep rooting around on the subject, what you find is that scientists studying the universe rounded the speed of light and took other shortcuts in their math that introduced an error so big that they had to invent 68 percent more mass in the universe called “dark matter”; theoretical stuff that could not be observed in any way, just to account for the error.

Labor Department Revision

The US Department of Labor this week offered their own version of “Dark Matter” revisions to their universe.

This week, the US Department of Labor did some similar math adjustments and made 501,000 jobs that they said had been created by the Trump Administration disappear.

The Labor Department revised down total job gains from April 2018 to March 2019 by 501,000, the agency said Wednesday, the largest downward revision in a decade.

The agency’s annual benchmark revision is based on state unemployment insurance records that reflect actual payrolls while its earlier estimates are derived from surveys. The preliminary figure could be revised further early next year.

US has half a million fewer jobs than believed after big government revision

Labor revised down leisure and hospitality payrolls by 175,000 and business services by 163,000. Retail employment was revised down by 146,400.

U.S. Payrolls Count Reduced by 501,000 in Year Through March

The Department maketh up and the Department taketh away, blessed be the math of the Department.

Folks, color me skeptical about this revision. I think the Labor Department has been cooking the books since Bush was President and they certainly were when Obama was President so why the change in methodology for just one year? Oh, coincidentally, this revision comes when Democrats finally figured-out that the only prayer they have in 2020 is if the economy goes down before the election—which they also are coincidentally trying to make happen.

“What’s good for the goose is good for the gander” as my dear departed granny used to say. Why stop at one year? If the Labor Department wants to change their methodology let’s go back, say ten years and see what has really been going on.

Bureaucracy First

Folks this is an illustration of what some folks dumbly call the “Deep State”. Personally I hate that term. I think what they are trying to say is that, in a sense, the government bureaucracy is so large and unwieldly that it is a force unto itself that can’t be led anywhere its career management is unwilling to go. Above all things, they are statists and will defend their institution from any outside forces of change.

Trump is an insurgent and as such needs to be taken down a few notches and shown who is running things. The boys in Labor decided that the time is ripe to make their contribution to the cause and it’s substantial. Trump has wed his fate to that of the economy and now is the time to stick him with it.

As I have stated before Trump is more of a cheerleader for the economy than he is an actual owner of its success or failure. The Market is overvalued and needs correction but how and what will trigger that is yet to happen. Sadly, the possible catalysts of correction are a target rich environment. The real question is will Trump advocate interfering with the Market (like Bush) or allow it to correct itself. Given that Democrats will not willingly help Trump, as Republicans were willing to do for Obama, Trump may have no choice but to let the Market correct naturally —which in the long run is the best outcome.

I’m just surprised that this story has gotten so little attention. Are Democrats really so busy fighting amongst themselves that they can’t take time to pummel Trump on his claim that “this is the greatest economy ever” or are they just so tone-deaf that it doesn’t matter to them. On the other hand, in the Dem’s defense, the revision was a loss of private sector, non-union jobs so maybe they don’t count anyways.

From my point of view, this was a real body blow to the President but I can’t find anything from pundits on either side of the political divide make hay about this revision.

So if Trump doesn’t lash-out at his own Dept. of Labor on Twitter then the media doesn’t care? What gives with that?

Last month the San Francisco Examiner published an article posing the question, what will San Francisco do if PG&E shuts the lights out to prevent causing a fire?

In a recent filing with the California Public Utilities Commission, PG&E explained that if the utility has to turn off, or “de-energize,” high-voltage transmission lines in the East Bay to prevent the start of a wildfire, power to the entire city of San Francisco could also be turned off. And it could be up to five days before power is restored.

Are we as a city — and each of us individually — prepared for that?

Imagine The City with no working traffic lights. Cellphone networks and internet phone lines could fail. People who depend on medical equipment, like oxygen machines, could be at risk. Food could spoil without refrigeration, both in restaurants and in homes. Schools would likely close for the duration of the outage. Hospitals, police stations, and the airport could continue to operate on backup generators, but with reductions in services offered.

And then there’s water and sewage. Gravity helps move water from Hetch Hetchy and other sources into the City’s largest reservoirs. But we need electricity to pump water from the reservoirs to homes and fire hydrants. And we need electricity to operate wastewater treatment plants.

What happens if San Francisco’s power is shut down to prevent wildfires?

The slug line of the article is worth repeating:

Imagine The City with no working traffic lights. Cellphone networks and internet phone lines could fail.

The author also mentions that preparing for PG&E to pull the plug for a few days would be good practice for when “the big one” hits.

Folks, this whole idea of purposely shutting off the power to one of the most populous cities in the country is just nuts. If it weren’t for the wacko environmentalists in this state, no one would even think this was a rational idea; especially in the case of a “preventative blackout”.

If the power went out for a mere 24 hours, San Francisco would start turning into a Mad Max world. After a week of no food, electricity, drinking water, and gasoline; is there any doubt that the place would need the National Guard? Do you really think a city whose citizens can’t afford toilet paper and hates the Second Amendment will voluntarily maintain social order in tough times? I think roving bands of Oakland Raider fans will be raising all sorts of chaos. Add a few fires into the mix when firefighting is a sketchy proposition and the place has real potential to go downhill fast.

PG&E might be the catalyst that ends the idea of San Francisco as a sanctuary city. Playing XBOX surrounded by armed guards at an ICE holding facility might look like paradise in comparison.

In this age of just in time delivery, any interruption to supplying stores with inventory will have huge consequences. A prolonged blackout or severe earthquake in SF or LA will see additional loss of life and property. I, for one, don’t want to be anywhere near the epicenter of either event.