Los Angeles Declares War on Colonel Sanders (and Your Portfolio) 12 comments
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Los Angeles City Council member Jan Perry thinks you are stupid.
Dense. Dumb. Obtuse. Dim-witted.
She also thinks I'm stupid. Indeed, I think it's fair to say that Ms. Perry thinks everyone in America is stupid.
The good news is that unless you live in the City of Angels, there's not much she can do directly to "smarten you up".
The bad news is that she just led the city council to pass a law with ripple effects that could have a serious financial impact on investors all across America - and around the globe.
How can a law passed by a podunk politician from La-La Land harm your portfolio?
Let me explain:
There's a 32-square-mile chunk of LA where the obesity rate is 30% among children, higher than the normal Los Angeles average of 20% or so. Now a high obesity rate among anybody - let alone children - is nothing to sneeze at.
But it's the City Council's solution to this problem that I found particularly disturbing
In a 13-0 vote yesterday, the City Council voted to ban new fast food restaurants from opening!
That's right - for a period of one year (the original plan was for 6 years), no new fast food restaurants will be allowed to open in a 32-square-mile-chunk of LA (heretofore referred to "FAT L.A" - Jan Perry's district).
In other words, the best excuse the Los Angeles City Council could come up with for high obesity rates is to point its finger at the fast food industry.
Instead of looking at parenting or education or home life, they thought it wiser to stop another McDonald's (MCD) from opening.
Instead of lowering taxes for people so that they can afford to eat better foods, they thought it wiser to prevent any more Carl's Junior (SYM: CKE) or Burger King (BKC) restaurants from appearing.
Instead of creating incentives for businesses to come to Los Angeles to create good paying jobs (instead of kicking them out) the best the Los Angeles City Council came up with was to tell Pizza Hut and Kentucky Fried Chicken owner Yum! Brands (YUM) to get the heck out of dodge.
Now, every adult in America who doesn't commute to work in a little yellow bus knows what they're getting when they walk into a fast food restaurant. Sure, McDonalds might have what they like to call a "healthy menu".
But everyone I know who walks into a McDonald's or a Burger King isn't really going there to eat a salad - they're eating there because once or twice each year they like to order a double bacon cheeseburger, large fries and a Coke (KO).
As for the children - well, what ever happened to parental responsibility? Isn't the job of the parent - not the government - to educate their own children as to what should and shouldn't be eaten on a daily basis?
Is the City Council of Los Angeles actually saying that residents of "FAT L.A." are not qualified to make that decision for their children? Clearly they are.
Is the City Council of Los Angeles actually saying that the government of "FAT L.A." is better qualified to make decisions for their citizens? Clearly they are.
But this kind of nanny-state activism raises some awfully disturbing questions - such as, Where does it stop?
Will the City of Angels send somebody over to your house to make sure that you finish your vegetables each night? What about brushing your teeth? Cleaning your ears? Cutting your fingernails? How fast should "poopie diapers" be cleaned? What about dirty dishes? And when should you throw away old shoes? I have no idea on that one.
And what about ice cream? Are Los Angeles City Council members going to dress up in paramilitary clothes and raid supermarkets that carry Ben and Jerry's Ice Cream?
Last but not least, has anyone even considered the psychological impact on children who are residents of FAT L.A.? Would Cheech and Chong have said they were born there instead of East L.A. if that was the case?
Where does this absurdity all stop? When do people start taking personal responsibility for their decisions? When do people start realizing that government is not part of the solution - it's part of the problem?
And worst of all - what if the laws being passed in "FAT L.A." get applied to other parts of the country? (I'd hate to see a FAT DELRAY where I live here in Florida - boy would I be in trouble).
If these silly laws did get applied to other parts of the country, what would that mean for the companies themselves? What about their stockholders?
(We all know if we let these health nuts from the west coast run wild on this one, fast food restaurants will be the next "Big Tobacco".)
While this may be bad news for the fast food industry in general, there is a silver lining. Any existing fast food restaurant in FAT L.A. won't have to worry about any new competitors. Indeed, if you own a restaurant in FAT L.A., the value of your business probably just went up by at least 50% in real terms (sounds like a motive doesn't it).
But that's not the only silver lining the fast food industry has when facing the fierce Rob Reiner-led granola crowd of Los Angeles activists...
The good news for the fast food industry is that they have an actual fast food war veteran to lead their attack against the City Council of Los Angeles....
And not just any fast food war veteran, an actual colonel - Colonel Sanders! If anybody could beat up on these beatniks I'm sure it's him!
That's the good news. The bad news is last time I saw him he looked like he was getting up there in years.
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This article has 12 comments:
If this described a mere handful of people with deeply unhealthy habits, it would be no great cause for concern. It's more than a handful. And if everyone were held responsible for his or her own health and medical costs, it would be irrelevant as a matter of public policy. Who am I to tell someone what he may or may not eat, right? Wrong. That happy state of affairs went out the window when taxpayer-funded medicine replaced charity hospitals in the business of caring for the poor (and the not so poor). If you want to take 1.45% of my pay for Medicare - a fraction sure to rise in the future - and use it to pay costs directly associated with the habits of others, you have also given me the right to dictate how those people may live to the extent that their choices affect the cost to me of providing that medicine. Same goes for Medicaid and other similar programs. If you don't like being told what to eat, lose the tax. I surely don't give a flying f**k what some random person in Los Angeles eats for dinner tonight. I'd very much prefer that it be none of my business. For now, however, it very much is my business.
Everything else you wrote is of course spot on. This is one of the dumbest possible ways to solve the problem. It manages to distort the market in a patently unfair way while also guaranteeing that it will not achieve any useful purpose. Bravo!
>> Instead of
>> Instead of
No, it's not "instead of". It's "in addition to". With this obvious distinction in mind, maybe you be less outraged.
>> Instead of looking at parenting or education or home life
"Looking at..." is not a solution. What's your alternative? Be specific.
Should they ban watching more than 1 hour of TV or video games a day? Even if it weren't a preposterous idea, how would you police that? Should they spend tax dollars on an anti-junk food campaign?
What can a local government do? One thing they can do is make the junk food less accessible. It doesn't have to be the only way to combat the problem of obesity. But, it's the kind of decision a local government has some control over.
>> Instead of lowering taxes for people so that they can afford to eat better foods, they thought it wiser to prevent any more Carl's Junior (SYM: CKE) or Burger King (BKC) restaurants from appearing.
If certain restaurants serve junk, why should the majority of educated people not prevent them from opening and hurting the health of their "uneducated" patrons? *
* It's hypocritical of you to on the one hand excoriate LA for recognizing many of its citizens make poor decisions when it comes to the food they eat while on the other hand mentioning (among the vague solutions you offer) "education" as the answer. Are there people out there who make bad eating decisions? There must be. Or else you wouldn't be recommending we "educate" them.
So, for daring to recognize that some diners don't know better, do you intend to rip yourself a new one?
>> Instead of creating incentives for businesses to come to Los Angeles to ...
Again, it's not "instead of". You're viewing these as "exclusive choices" when they're not.
...
Lastly, is this the kind of analysis and reasoning you use to evaluate investments? This sounds more like straight political argument. It's an issue worth debating. But, it seems out of place for "Seeking Alpha".
You've seen right through me - this is EXACTLY how I analyze stocks. How did you know? I feel totally ashamed now that you've "Outted" me.
All kidding aside: I've been an analyst and professional investor for 20 years.
I have the kind of track record that makes me feel confident in myself when I look in the mirror.
I've been a "writer" for a couple of years and I enjoy it immensely. Usually I write articles that study either the cash flow, income statement or balance sheet of any business I'm looking at and I like to think (or at least I've been told) that I do a half-way decent job at it.
But several months ago I started writing more op-ed pieces on finance where I tried to interject some levity into the discourse. I was pleasantly surprised to find that many readers found what I was writing humorous. So I kept doing it.
Perhaps it's the current market stress folks are feeling or perhaps it's something that I cannot explain or will never understand but many of these pieces have been well received and have made people laugh. Several of them have been posted on other websites for the same purpose (of making a bloggers readers smile).
And the truth is that I've gained some pleasure from that. Putting a smile on the face of an investor in this market - or in the context of largely dry financial writing - has made me happy and I have hundreds of notes and emails attesting to that fact.
Of course that doesn't mean that this kind of article should be used in place of serious financial analysis. But I hope that in the context of this great website that these rarely written (sometimes funny) articles have a small place for a reader who is sick of bad news.
Have a great day,
Dylan Jovine
Dylan made a mistake when he responded to you - he never even debated some of the "finer points" in your comments. Frankly, I think you've missed the main premise of his whole argument (kind of missing the forest for the trees so to speak).
--For starters your suggestion that he replace "instead of" with "addition to" completely ignores the basic premise of the article which is to get government out of the lives of citizens. He doesn't think the government should restrict fast food restaurants IN ADDITION TO anything. (By restricting new restaurants all you do is create longer lines at the ones that currently exist).
--With respect to the "alternatives" you so desperately seek I'll admit - I cannot offer any more then the 3 he already posted. It is not my job as I am not a politician so I haven't given it any more thought then what he's described. I will say that any "alternatives" should be PRIVATE MARKET ALTERNATIVES THAT FOSTER THE KIND OF BUSINESS PRACTICES THAT WOULD PROMOTE THE KIND OF HEALTH RESULT THE GOVERNMENT WISHES TO OBTAIN.
(i.e. tax breaks for certain kinds of food joints, tax breaks for parents of children deemed to be in good health, etc).
--Now here is the weakest part of your argument (and proof that you completly did not understand what he said or intended in this article): You say the following:
"It's hypocritical of you to on the one hand excoriate LA for recognizing many of its citizens make poor decisions when it comes to the food they eat while on the other hand mentioning (among the vague solutions you offer) "education" as the answer. Are there people out there who make bad eating decisions? There must be. Or else you wouldn't be recommending we "educate" them."
Where did he ever insult the citizens of LA? What he said was that the GOVERNMENT WAS INSULTING ITS OWN CITIZENS FOR ESSENTIALLY TELLING THEM THEY ARE NOT SMART ENOUGH TO MAKE DECISIONS THEMSELVES (i.e. the "nanny state")
What he is saying is that citizens ARE smart enough to make their own decisions - especially when given proper financial incentives which I am sure you can grasp the concept of (let me guess - you're a wanna be hedge-fund manager, right?).
--And finally, you finish with your "grand" flourish:
"So, for daring to recognize that some diners don't know better, do you intend to rip yourself a new one?"
I'll throw that one back to you: For daring to comment on an article that is beyond your comprehension to understand, do you intend to rip yourself a new one?
While I agree with the person 100% (I wish I would have responded with that argument) I did want to clarify that for the sake of editorial honesty/candor, etc. They should have logged into this site with their own name but they didn't.
That being said - I couldn't have made the argument better then she did! HEHE
--DYLAN JOVINE
>> Where did he ever insult the citizens of LA?
Implicitly. Not explicitly. Which is no worse than what LA did. Let's review.
According to Dylan, LA thinks some of its constituents make poor eating decisions. Well, also according to Dylan, we must help parents educate children or educate themselves about making better dining choices. So, you see, Dylan and LA are in agreement about one of the problem's root causes: some people don't know better.
Now, nowhere does LA come out and call their people "stupid", "dense", etc. But, you READ THESE INSULTS INTO IT. Over what? Over the same observation Dylan made? Be careful: The fact that you suggest different policy prescriptions doesn't make a difference regarding the "insults". The fact is: you, too, Dylan, think some people need "help" making better decisions. LA hasn't been any more "insulting" to its citizens than you. If you want to read insults into it, then do the same with your piece.
And then there's Dylan's reference to retarded people, the "people riding the little yellow buses". (Don't anticipate that I misread Dylan's explicit statement, because I didn't.) Yes, I read your statement "everyone you, Dylan, knows" knows junk food is junk food. Explicitly, you're saying "there isn't anyone who doesn't know just how bad junk food is" and, therefore, "I, Dylan, am not calling anyone retarded". But, as I said, if one of YOUR solutions is "education", then one of the problems is "lack of information". By definition, that means some people really DON'T know junk food is that bad for them. That contradicts your earlier statement. You DO believe some people lack information to make better decisions. Worse, LA never compared these people to retards. But, YOU DO. Not explicitly. But, this seems implicit to me.
I'm sure you didn't (and maybe still don't) see it that way, or else you wouldn't have written the piece exactly this way. I understand.
>> What he is saying is that citizens ARE smart enough to make their own decisions - especially when given proper financial incentives
If they're "smart enough", then why do they need "financial incentives"? Don't you see the implicit contradiction here?
>> For starters your suggestion that he replace "instead of" with "addition to" completely ignores
Not "completely". Yes, my one point doesn't address his whole sermon. But, it should provide cause for you to calm down.
Dylan kept repeating "instead of, instead of, instead of". Some of his outrage comes from his *apparent* interpretation of LA's decision as "the only thing LA is going to do to combat the problem is this stupid law" (my paraphrasing). But, restricting fast food outlets isn't the only thing LA wants to do to help its citizens eat better.
"Instead of" implies exclusive alternatives. If that wasn't the message intended, then perhaps Dylan's article should be edited to improve/refine his message. (Come to think of it, since you have his login, maybe that was part of your job? Would that explain why your response is hostile and even personal?)
>> the basic premise of the article which is to get government out of the lives of citizens.
If you want to get "government out of the lives of citizens", then why are you recommending "financial incentives" to get people to eat the food you want them to eat? I don't live in LA. But, to use an analogy that affects me greatly, is not the bailout of Fannie & Freddie "getting into my life", even though it's "only" a financial action?
>> (i.e. tax breaks for certain kinds of food joints, tax breaks for parents of children deemed to be in good health, etc).
So, restricting permitting to favor certain outcomes *IS* "the nanny state in action" but rigging the tax code to favor these same outcomes isn't?
...
By the way, I heard on the radio yesterday that more and more LA urbanites have picked up GARDENING, so they can feed themselves healthier food. Land is somewhat fungible. So, when LA prevents the opening of new fast food outlets, some plot of land somewhere will become available for more gardening.
LA's mayor has been encouraging this. So, you see, LA is doing more than just restricting the opening of new fast food outlets. I don't follow this story closely. But, I doubt that's the only thing either.
Can/should they do more? Maybe you can help them brainstorm. If not now (because you're presently gainfully employed), then perhaps in the future.
Good luck, Dylan and crew.
The fact that one pays taxes does not give that person the right to dictate how others run or should run their lives. Paying taxes gives one the right to use services provided to the public and to participate in the government process.
Instead of punishing ALL people who may like the occasional piece of fried chicken or order of french fries, why not target the true reason behind this law... obese people. Not sure how this would be done other than eliminate certain public benefits for those who are above certain BMI's, but even this has serious flaws.
There is no easy solution to the obesity problem, but moving us one step closer to socialism should not be a solution at all.
You can eat "fast food" and be relatively healthy. It might be a good idea to keep away from french fries drenched in transfats, Colonel Sander's chicken, and donuts, but having a burger from BK or Wendy's isn't going to be that much different from having a burger at home (except that the latter will probably taste better).
To be honest, I disagree with the nonsensical view that "private" dominance over our lives is somehow automatically better than "public" (i.e. government) dominance. The problem is that the private sector is not capable of acting in unison in a way that would fix our most major problems (since private actors tend to focus on the micro- view rather than the macro- view) while the public sector is run by a bunch of incompetent boobs elected precisely because they will not "rock the boat" or come up with anything other than the most trite solutions (you can't simply ban anything that's bad; it never works).
So I guess I'm saying I agree with you and don't at the same time.