Commentary

Despite The Economy Some Make Money

By Neil Rubenstein

Observer Columnist

Have you noticed even in the worst economic downturn in 70 years there are people making a fortune over the misfortunes of others?

For example, those who bought the Dow Jones 30 stocks on Valentine's Day 2009 are smiling all the way to the bank with the doubling or tripling of their net worth. Then there are others who didn't have glaucoma, cataracts or macular degeneration and started in 2010 buying real estate.

At about this time we saw a new kind of polecat in our midst. A Texas delegation rode into Los Angeles with their chauffeurs and laid siege to the City of Vernon in hopes of luring firms to their neck of the woods. They had some success because California has high taxes and many regulations which increase the cost of doing business.

Not to be outdone, Michigan and New York spent millions on television ads trying to get companies to relocate.

Just recently the governors of Virginia and Utah were in town.

One doesn't need to talk to the entertainment industry about all the movies made away from Hollywood or the longshoremen watching the port being built a short distance from San Diego in Mexico.

President Obama's budget plan would raise roughly $1.1 trillion over 10 years through a combination of limits on tax breaks, a tax on the banking industry and new estate taxes according to the Tax Policy Center. The United States Senate voted April 22, 74 to 20, to open debate to tax online shopping. Soon they will attack and reduce Social Security and the mortgage interest write-off.

So, you think you have money problems? Well, your Uncle Sam is going to sell $40 billion in treasury bills and repay the loan with interest four weeks later.

How much are you getting in interest? Most of us would say less than 3%. What would you say if I whispered in your ear, "There is a California agency paying 6%"? But it's only for a very select group in the CalPERS retirement system. As you recall, these are the same people who are raising the City of Culver City's contribution in fits and starts by 50% because their investments turned sour and they need to keep those $15.000 per month pension checks flowing.

And there's more to come.