The California Budget Impasse

California is bigger than many countries. The population exceeds 36 million people.  The budget has a shortfall of over $15 billon.  The total budget exceeds $100 billion.  The reason that no budget has been passed, and there is an annual ordeal in balancing the budget, is that the law requires a two thirds majority for passage.  Neither political party has that majority. Both the Democrats and Republicans have fought for their way to balance the budget.  Neither has the power to bring a permanent resolution.

 

The Democrats want to raise taxes to cover the budget and the Republicans want to reduce spending to match current revenues.  This argument will probably go on long after Arnold Schwarzenegger has left office.  The two thirds law was probably passed to protect the public from excessive spending.  The consequence has been just that.  The California legislature has a history of poor spending habits.

And You Thought You Were Wealthy

The wealth of the United States is mostly divided between the very rich and the rest of us.  How rich are the very rich?  They earn so much money that many have an income of $4,000 per hour.  My source for this extraordinary data is BusinessWeek magazine dated August 25, 2008. A search of the BusinessWeek web site shows an equally unbelievable pay report dated 2004. The CEO of Johnson & Johnson had a total compensation of $31.9 million in 2007.  Oracle Corp. co-founder Larry Ellison was reported by Bloomberg News as receiving a pay package of $72 million.  But Bloomberg reported that he is the second best paid CEO.  John Thain, CEO of Merrill Lynch & Co. earned $1.7 million more than Mr. Ellison.  Mario J. Gabelli of the Gabelli Asset Fund was a poor earner of only $9 millon last year.  This information was in the Gabelli Asset Fund annual report. It is probably explained by the fact that the fund lost almost 20% of its value since last year at this time.     

 

What is even more unbelievable is those wealthy people do not pay income taxes at the same rate that working people do.  The pay is received at the capital gains rate of 15%.  How do they get away with doing this?  They take most of their pay in stock options.  There is no tax on stock options.

 

To put this in another form the Pareto principle almost applies but it is some what worse. 10% of America’s population own approximately 80% of everything.  The recent increases in gasoline prices has no impact on their life style.

 

When Barck Obama says he wants to tax 5% of the population at a higher rate, he is looking at those very wealthy people who are most likely not reading this blog.   

How Old Is Too Old?

Let’s be honest we are judging everything about the people running for president. What they have done in their lives, their religion, their marital relations, the color of their skin, and their age. It may not be fair but it is reality. 

Age is very important. I personally do not believe that race or religion are important at all. Apparently I am in the minority in this view. Anna Quindlen wrote about the age issue in her Newsweek column on February 4,  2008. John McCain has tried to show that he understands that this is a real issue by nominating someone of just 44 years old as his vice president. Sarah Palin does not meet John McCain’s own definition of who should be selected for vice president (someone who could step into the job on day one). Along with his statement, “Today We Are All Georgians” does call his judgment into question.  Would he take America to war over Georgia?

Anna is probably correct when she wrote that “… it ages a person in dog years. Each year in office is roughly equivalent to seven years in the life of an ordinary citizen.” Look at how haggard all the men have been after serving as president for eight years.  John McCain just turned 72 years old last week. If he should die in office Sarah Palin would become president. How many Americans would vote for Sarah Palin for president?

People in New Orleans Like Hurricanes

Excitement and entertainment. It’s part of what makes New Orleans really interesting.

 

Why Do People Like to Live in New Orleans? I entered the question into my search engine and found this interesting website.  The fascination with New Orleans is not logically explainable on any web site I have found.  Clearly the city has an impact on many people that are perhaps fascinated by its history and the Bourbon Street party atmosphere.  The city’s reputation has been amplified by movies like The Big Easy and A Street Car Named Desire.

       

Perhaps the reason people can’t leave is they feel trapped by their family history and their lack of education.  It is a city of poor people that are mostly Black.  We non-southerners all learned that thanks to Hurricane Katrina.

 

Enter the question “Why live in New Orleans?” and you get Related Searches at the top with links to Poverty Point, Political Poverty, World Poverty, Global Poverty, and Poverty Issues.  As I scanned down I found this commentary from Matt Davis.  It really does not explain the allure but is interesting.

 

The city is dying because many people are realizing there are other places that are just as much fun without the fear of hurricanes and they offer better opportunities too.  The U.S. government should either relocate this city to higher ground or abandon it.

Competition is Dying in America!

M&A is the acronym for Merger and Acquisitions.  It’s going on all the time.  The list compiled by CNN for just the last three days is astonishing.  It’s worth hundreds of millions of dollars.  This process is killing competition and raising prices for everything.

 

I will pick just two industries to demonstrate my point.  They are super markets and drug stores in the San Fernando Valley (metropolitan Los Angeles).  There are now 1.6 million people living in this area stretching from Burbank and Sylmar on the east to Calabasas and Chatsworth on the west.

 

 

THE SUPERMARKETS

Today there are only four major chains left in this area.  The number of independent stores is so small that most people do not know of their existence unless they are in the immediate neighborhood.  Most small markets do not have the resources to do the advertising of the chains.  Specialty markets like Whole Foods and Trader Joe’s do not offer a complete array of products.

 

The chains currently are Albertson’s, Ralphs (owned by Kroger), Von’s (owned by Safeway), Vallarta (catering to Hispanics and doing quite well), and Jon’s.  However 20 years ago the list included Albertson’s, Alpha Beta, Hughes, Lucky, Market Basket, Ralphs, Safeway, Thriftimart, and Von’s.  In addition there were many stand alone super markets that were big enough to advertise in the major newspapers.  They included the All American Market, Panorama, McDaniels, Alexander’s, and Gelson’s (now a chain in only the wealthiest neighborhoods).

 

There were others stores too but they were absorbed into the remaining chains thanks to Yucaipa Cos.

 

 

THE DRUG STORES

The list is not as long but the trend is obvious. In the past it was Rexall, Thrifty, Longs, and Sav-on chains and many independent stores.  Today the list is Rite-Aid, CVS, and Walgreen’s.  Both Sav-On and now Longs are part of CVS.  Although Walmart, Costco, and Target have pharmacies they are usually not convenient and have limited variety.

 

 

There are other industries that have seen consolidations including banks, department stores, and airlines.  Los Angeles used to be the home of many savings and loan associations (California Fed, Glendale Fed, Great Western, American) as well as many bank chains that have been absorbed by Bank of America or Wells Fargo (First Interstate, United California, Security First National).

 

The consequence of the reduced number of businesses in any industry ought to be obvious.  Imagine if your company was the only one offering a particular commodity or service.  You could charge what ever you wanted.  If there were only a few competitors rather than many, your pricing would be less flexible.  There are lots of house painters here in my neighborhood so pricing stays low.  Gasoline is available from only five companies within three miles from my home.  Remember when every major intersection had a gasoline station on all four corners?

 

So the loss of Longs Drugs, May Department Stores, and Linen and Things means that their competitors can earn more but all of us will pay more.

Barack Obama for President

Being a political Independent is difficult when most of the country is taking sides in a presidential campaign.  I am still a Democrat at heart.  The one really important personal issue for me is health care.

 

John McCain is a very good man.  He has served this nation with honor.  He has considerable experience in the Federal government.  He also has taken a strong stand against universal health care.  That one issue alone is reason enough for me to oppose him.  However he has also taken positions on many other issues that are diametrically opposed to my views.  That includes abortion rights, stem cell research, ending the war in Iraq, improved international relations through negotiations, etc.

 

The issue of Barack Obama’s lack of experience is totally gone now that Sarah Palin has been selected as John McCain’s running mate.  Given McCain’s age the possibility of Palin becoming President is very real.  That lack of experience was an issue for George W. Bush, Bill Clinton, and John Kennedy.  Americans made the right decision two out of three times.  35 million people watched Barack Obama last night.  Was that because he is a celebrity or did he have something to say?

 

Look at how well Barack Obama has managed his campaign.  I believe that is an indicator of how well he will do as president.  Even if I am wrong, John McCain promises nothing new.  He would continue most of the programs and ideas of the Bush presidency.  The United States cannot afford four more years of the failed Bush policies.  Perhaps Obama will not deliver on all of his promises.  There is the possibility that he will deliver on some of them.

Talking Heads Know No More Than Me

Obviously as a poltical blogger, I watch most of the television shows discussing politics.  That means watching CNN, Fox, and MSNBC.  I also listen to many talk shows on the radio.  I always thought these ladies and gentlemen may obtain interviews with the various elected officials but they really do not know a great deal more than me about the likely outcome of any event.

 

 

The most recent evidence is John McCain’s selection of Alaska Gov. Sarah Palin for Vice President.  This morning’s Los Angeles Times mimicked those talking heads in suggesting that the likely choices were Mitt Romney, Tom Ridge, Joe Lieberman, or Tim Pawlenty.  Sarah Palin wasn’t even mentioned as a long shot.  When I initially heard her name without the identification that she is the governor of Alaska I had no knowledge of her.

 

 

So why do all of us poltical nuts watch those shows?  We are all hoping to learn something about what will happen in this unbelievably complex world.  Since none of those talking heads know the real plans of John McCain or Barack Obama my ideas and opinons are just as valid as any of theirs.  Actually my opinions are better than theirs because I try to watch a listen to all of them and then reach my own conclusion.

David Duchovny In Rehab For Sex Addiction

David Duchovny has a sex addiction? What is sex addiction? I found the Psych Central explanation to this problem rather interesting.

Sexual addiction is best described as a progressive intimacy disorder characterized by compulsive sexual thoughts and acts. Like all addictions, its negative impact on the addict and on family members increases as the disorder progresses. Over time, the addict usually has to intensify the addictive behavior to achieve the same results.

For some sex addicts, behavior does not progress beyond compulsive masturbation or the extensive use of pornography or phone or computer sex services. For others, addiction can involve illegal activities such as exhibitionism, voyeurism, obscene phone calls, child molestation or rape.

Sex addicts do not necessarily become sex offenders. Moreover, not all sex offenders are sex addicts. Roughly 55 percent of convicted sex offenders can be considered sex addicts.

Does David Duchovny love to have lots of sex?  His wife, actress Tea Leoni, is quite atractive.  Maybe he wants more action than she does.  Has he been involved in obscene phone calls, child molestation or rape?  The details are lacking.

 

I certainly would like more sex activity.  My wife and I were very active up to a few years ago (I am almost as old as John McCain so I have slowed down a lot.  Damn it!). What a great topic for Larry King to explore.

Happy Birthday John McCain

Congratulations on your 72nd birthday.  For a man your age and the torture you went through in Vietnam you are in remarkably good condition.  You have served our nation well and everyone honors that fact.  However, just because you were a POW and have been in the Senate for 14 years does not qualify you to be president of the United States.

 

I will not review your voting record here.  I do question your wisdom and judgment when you select a totally unknown person to be your running mate in this election.  Alaska Gov. Sarah Palin has been in office for just two years and prior to that was the mayor of a small town that is unknown to most of America.  In addition she already has questionable record.  I am adding this interesting Alaskan perspective about Sarah Palin.

 

The job of president is extraordinarily difficult.  Given your age I would have expected you to nominate a vice president who is qualified to handle that position with ease if you become incapacitated.  Selecting a vice president is your first decision and your choice was not in the best interest of this country.  It was a political choice and not one for the good of America.  Gov. Sarah Palin is a very poor choice!

 

There are many other reasons that I could identify for not supporting you but your nomination for Vice President answers the question of my choice.

 

I am wholeheartedly supporting Barack Obama for President.

 

The Pickens Feud

There is a feud between T. Boone Pickens and NBC over a 15 second advertisement about the use of natural gas in cars.  His contention in the ad is that the United States isn’t doing anything to further the use of natural gas.  Boone says that other networks have accepted the ad but NBC refuses to take the ad without proof to support his contentions.

 

A little research unearthed this article in USA Today dating back to July 2007.  It seems to confirm Boone’s contentions.  Even if it doesn’t, the Boone ad definitely highlights the fact that little is being done by the government.  That I have to go to Canada.com to find anything about the feud is somewhat disconcerting.  Other networks most likely do not want to interfere with NBC policy.  NBC needs to publicly explain their decision to refuse the ad.

 

Here is a video link to the ad:

http://link.brightcove.com/services/link/bcpid1648674250/bctid1755448369

It will be interesting to see if any presidential candidate picks up on this idea.  T. Boone Pickens is a smart man.  His opinion ought to be considered with care and respect.