By Timothy D. Naegele[1]
Lots of Americans are struggling to make ends meet—and not making it. The Covid pandemic affected businesses, and produced delayed effects in many cases. They are collapsing now; Americans are losing their jobs; and there is a ripple effect in our economy, as homelessness increases.[2]
For others, they have seen the prices of their homes soar to stratospheric levels, especially in the privileged enclaves of the rich and famous. For example, on the fabled Sunset Boulevard in Los Angeles, the road is clogged in early afternoons, as workers stream east from fancy homes in Brentwood, Pacific Palisades and Malibu.
This is true in Santa Barbara too, as workers travel south on Highway 101, having served their “masters” in Montecito, Hope Ranch and other neighborhoods. And in Silicon Valley and other wealthy areas, workers with even decent wages live in aging campers because they can’t afford the cost of housing.
Throw in the increase of crime and drug usage, and incendiary living conditions exist, certainly for young children.[3] And California is by no means unique or emblematic of this decline. Our cities have become crime- and drug-infested to such an extent that Americans are wise to avoid them like the plague.
This is especially true where officials are “soft on crime,” and demand that criminals be given a slap on their wrists at most. Repeat offenders are released routinely to commit crimes again and again; and the spiral of lawlessness continues unabated. It is not surprising that many Americans are fleeing to law-and-order states and areas of the country, to live and raise their kids.
For senior citizens in their twilight years, these issues are especially acute. Many cannot afford the necessities of life; and are considered burdens by their offspring, who would abandon them without a twinge of conscience or guilt, despite everything that such seniors did for them. Elder abuse is a fact of life in America today.[4]
_____
© 2024, Timothy D. Naegele
_____
[1] Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). See, e.g., Timothy D. Naegele Resume-21-8-6 and https://naegeleknol.wordpress.com/accomplishments/ He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army during the Vietnam War, assigned to the Defense Intelligence Agency at The Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., https://naegeleblog.wordpress.com/articles/ and https://naegeleknol.wordpress.com/articles/), and studied photography with Ansel Adams. He can be contacted directly at tdnaegele.associates@gmail.com
[2] See, e.g., https://www.dailymail.co.uk/yourmoney/consumer/article-13531969/american-homeware-brand-closing-south-carolina-factory-mexico-jobs.html (“Iconic American homeware brand Tupperware closing its last US factory after 76 years to move jobs to Mexico in huge blow to rural South Carolina town”) and https://naegeleblog.wordpress.com/2020/07/09/homelessness-in-america/ (“Homelessness In America”)
[3] See, e.g., https://naegeleblog.wordpress.com/2020/07/09/homelessness-in-america/ (“Homelessness In America”)
[4] See, e.g., https://naegeleblog.wordpress.com/2024/03/22/elder-abuse-is-alive-and-well-in-arizona/ (“Elder Abuse Is Alive And Well In Arizona”)
Throw in divorces, and ravenous divorce lawyers who make things worse to earn their shekels, and there is the recipe for future estrangement and disasters.
See, e.g., https://naegeleblog.wordpress.com/2011/07/14/divorces/ (“Divorces”)
NaegeleBlog 
TIM: One more key factor that overshadows all of us, investors and non-investors alike: The clear, glaringly obvious drift of the Republic away from Rule of Law and according to some pundits, approaching banana republic land. This is not a new development by any means but rather a long process. Moreover, it’s way bigger than Donald Trump, who is functioning as a “lighting rod”.
I must say as a California native, not a transplant and third generation Californian, that things have irreversibly changed. I think it’s similar in Oregon and Washington and Nevada, among other states, as well. I have to take it all in and try to best position myself and protect myself at the same time. It’s a major challenge when living in “interesting times” as we all find ourselves in currently. This is not just a rhetorical danger or a political discussion. Please let me briefly explain in detail why: -California was founded as a Republic in Sept. 1850 with a state constitution.
-The California constitution was respected and followed until about 1990, when then Gov. Pete Wilson (R) decided to ignore aspects of it for pragmatic budgetary necessities *. Pete Cheated. ( Mission Impossible: The hard Calif. constitutional requirement to have a “balanced budget” each and every fiscal year). California began its long journey down the Road of Perdition during the first Bush Recession of 1990-1992.* “The smog-impact fee was enacted by the Legislature in 1990 during desperate financial times ( A Recession), hitting anybody moving into the state with a $300 tax for the supposed pollution their out-of-state cars and trucks would cause — even new vehicles that would pass California’s tough smog test. It evoked little opposition at first, because existing state residents did not have to pay it. The tax passed, even though the Legislature’s own legal counsel warned that it was unconstitutional on both state and Federal grounds, said Assemblyman Tom McClintock (R-Northridge).
Sacramento Superior Court Judge Joe Gray ruled the fee unconstitutional in 1997 and ordered the DMV to issue automatic refunds to everybody who had paid it, going back three years from the date when the case was filed in 1995 under the state’s statute of limitations. That ruling left out only motorists who paid the tax from 1990 to 1992.” * Jordan vs. DMVDMV Plays Hardball on Smog-Impact Fees
| | | | DMV Plays Hardball on Smog-Impact Fees
The California Department of Motor Vehicles, an agency that critics rank as a master of bureaucratic hardball, i… |
|
Now, 34 years later, another recession is now in-play but aggravated by the prior exodus of tax paying businesses large and small, as well as much of the Upper Middle Class due to tax and regulatory excesses promoted by the Progressive Democrats. We replaced them with lower value, lower productivity migrants, many who do not pay any net income tax but all vote democratic. The prior balance between the Middle Class “Haves” and a large and growing underclass (Have Nots) is now a structural issue after so many decades. Welcome to the reality of raw democracy or mob rule. This is the lot of most all Latin American countries historically. They do not have a vibrant middle class for so many obvious reasons. All are corrupt, as we now have become in Blue States like California and New York.
-1 Million residents left Calif. between 2012 and 2022. The Calif. state taxes they once paid are (permanently) gone, leaving a structural deficit behind. Capital is always mobile and always seeks-out places where it is treated best. This is human nature. – Capital is fleeing Calif. not coming to Calif. anymore. This is a huge red flag when capital flows are negative, sans. Federal funds from like-minded Democratic Administrations, of course.
-The current Gov. Gavin Newsom is an ideological governor. This explains his otherwise incoherent or bizarre statements and policies. Gov. Newsom is a Communist (a.k.a. Progressive). His actions reveal this alarming truth. For example, let’s return to the Constitutional requirement to have a “balanced budget”. Gavin must stretch the truth in order to meet this hard requirement every year, but especially this year. Why? Well, for starters, it’s virtually impossible for him to “balance” the Calif. state budget in order to meet the Constitutional requirement. He has to juggle too many apples. It’s not possible, so like any good Progressive, he makes up new rules or justifications. Financial engineering and budget gimmickry.
Bill O’Reilly reported last week that the Calif. budget deficit is now $529 MILLION. It’s simply impossible to politically make the necessary cuts this year to balance a budget this lopsided. Ditto with FY 2025, as well. Much more state debt and borrowing must now be incurred to cobble together a nominal “balanced budget”. The truth is far less charitable: It’s all a construct and a LIE. Therefore, the reality is the coming new budget is non-conforming and therefore illegitimate. Now, we have crossed the Rubicon. Like the cheating husband, this is not the first rodeo either for California. Yes, we are well along the proverbial slippery slope. What does this fact and development mean? Well, first and foremost, our Republic, just like Rome circa 250 A.D. is corrupt beyond repair. Secondly, no more rule of law. Capitalism requires rules and stability. We are losing both. Anything goes, as in no standards and in effect “Pirate Rules”. Shall we then demand a pirate’s right to “parlay”?? Captain Jack Sparrow? LOL Now, back to capital flight out of (Compton) California. Gov. Gavin Newsom has entertained the idea of an “exit tax” to stem the capital fleeing his style of government. His approach is to further restrict freedom by more taxes and regulations rather than true reform, hence the ingrained corruption. Probable result, even more capital flight. When you think about it, an “exit” tax as proposed by Gavin, is actually a form of capital controls historically employed by failing Banana Republics such as Argentina or the “Republic of California”. So, you are not necessarily free to leave and stop paying taxes to the failing Republic of Calif. or State of New York, for example. California still may own you (Gavin’s Chattel) anywhere in the world for up to ten years after you move out. There will be quite a few other fiscal failures ahead, as well.
The rich are in effect trapped in their version of a Roach (Hilton) Hotel of sorts. LOL. Of course, true Billionaires can find a work-around and jet away into the sunset in their private Gulfstream Jets like John Kerry. In contrast, you and I must fly on Jet Blue or drive on our well-maintained superhighways (super pot holed). Different rules (“stokes”) for different folks, a.k.a. the “Great Unwashed”
Think of it as a tax similar to what Americans who hold dual citizenship and no longer live in the U.S. must prepay. These expats are still on-the-hook for all Federal income and capital gains taxes regardless. So, if they choose to renounce their U.S. citizenship, they must first pay a lump sum upfront. Gavin’s California needs a reliable income tax cash flow, so he structures his new exit tax a bit differently, as a percentage of your entire net worth amortized over a ten year period (Primary residence or house would be exempt from an exit tax, of course). Hint: Real estate would be a gigantic loophole for the rich and famous ( $20 Million Bel Air Mansions on Stone Canyon Road, for example). Think of it as Gavin’s taxpayer installment payment plan or alternatively, an annuity for the Calif. Franchise Tax Board. Smart.
However, for renouncers, all capital gains yet unrealized and any income tax due for the current year must first be prepaid to the U.S. Treasury before the Dept. of State will allow a citizen to formally renounce their citizenship. I have heard its a long wait, as well.
I expect this new unconstitutional California “exit tax’ to be imposed next year, sometime after the elections. Recall New Jersey first imposed an exit tax in 2004. Bad ideas in government are like a bad nickle (a slug) that keeps recycling in the vending machine. Bad ideas like this are also highly contagious, as well. An Overview of the New Jersey “Exit Tax” — Vision Retirement
| | | | An Overview of the New Jersey “Exit Tax” — Vision Retirement
If you’re looking to move out of state to reduce expenses and/or begin retirement, there are many considerations…
I foresee more states to catch this budget deficit “cold” as their state budgets sink further into arrears during this slowly emerging Recession (2024-2028). Investors need to be aware and try to find countermeasures, if any. Roth IRA’s are currently one good defense, under current IRS TAX RULES. You can do it too !!!
Think RED not blue. By all means, give Gavin a black eye!
H.Craig Bradley
LikeLike
Thank you, Craig, as always. That’s a mouthful.
First, I dealt with Pete Wilson in Washington, D.C. when he was a U.S. Senator representing California.
Second, I will always praise him for putting the most odious trade association in America out of business.
See, e.g., https://naegeleblog.wordpress.com/2014/09/08/the-state-bar-of-california-is-lawless-and-a-travesty-and-should-be-abolished/ (“The State Bar Of California Is Lawless And A Travesty, And Should Be Abolished”) and https://naegeleblog.wordpress.com/2021/08/12/california-is-a-mess-and-its-state-bar-remains-the-most-odious-trade-association-in-america/ (“California Is A Mess, And Its State Bar Remains The Most Odious Trade Association In America”)
Third, capital flight and the rules aimed at stemming it are byzantine.
Fourth, I have been a “fan” of Hispanic-Americans since I was in grade school in Los Angeles. In many ways, they have been the backbone of California for centuries; and most are honest and very hard working.
Lastly, balanced budgets governmentally are a pipedream.
LikeLike
Tim: I cannot endorse Pete Wilson in his public role as either U.S. Senator or Governor. He did not have presidential potential, as neither does Gov. Gavin Newsom. Not widely esteemed outside of the home state of California. In 1999 I had lunch with my father at the old Bel Air Hotel and Restaurant, as it once was before selling twice, finally to the current owner: Sultan of Brunei and undergoing an extensive 2-year remodeling. Pictures of President and Nancy Reagan hung on the restaurant walls. The old Bel Air was the exclusive destination of the California elites from 1945 onward. Bel Air reflected old California: My California! It had class and was classic in the true sense of the word. In addition, the food was perfect and the service first rate. Here is a recount of my observation of Gov. and First Lady, Gail and Pete Wilson: Pete Wilson was standing at the Matre de’s station at the front of the dining area near the lobby doors. An elderly man and his young son approached Pete Wilson. The old man said: “I would like to introduce you to my son”. I was seated at table just ten feet away and had a front row seat. Pete Wilson initially turned away from this man and his son, then looked around as to first see who might be watching. Suddenly his mood visibly changed, he pivoted and then they shook hands and briefly exchanged greetings. I was staring him right in the eye and he knew it too. ( As I recall, I really had to “bite my tongue”)
My late father and I were less than impressed with Pete Wilson, widely regarded by my whole family as a mediocre governor at best. In fact, my dad referred to Pete Wilson as a “little Republican Putz”. (My father was Catholic). I would put it a bit more bluntly: Pete Wilson as a person is an Asshole. He has a lot of company too. How his wife Gale put-up with him so long is a mystery. Of course, many Democrats said the very same of Nancy Reagan, in reverse.Politics and personality again.
H.Craig Bradley
LikeLike
Thank you again, Craig.
First, I spent 21 years straight in Washington, D.C, and was around politicians who were besieged constantly — in Capitol Hill corridors, at airports, everywhere. Few act differently than Pete Wilson did that day.
Second, I have been to the Bel Air Hotel many times. My old friend — and multi-billionare, for whom my son worked as a Senior Vice President — the late Jerry Perenchio used to hold Univision’s annual meetings there. It is a lovely venue.
Third, with due respect, you were expecting the unexpected. Politicians deserve private lives as well.
LikeLike
Tim: Regarding my prior comment about why I could never endorse the merits of former Calif. senator and governor, Pete Wilson, based upon close physical observation while dining with my late father at the old Bel Air Hotel and Restaurant in the early nineties. Politicians care about their work or “job” and prefer to be in-control of variables such as scheduling their activities and meetings each week. They care even more about guarding their public image as they appear to others nearby. They sure don’t especially welcome unscheduled or unanticipated surprises for which they do not have adequate control. In-addition, most politicans, such as Pete Wilson, thus behave in a manner demonstrating strong risk adverseness. The last thing any professional or at least career politician wants is to find himself inadvertently facing a circumstance where he must “think on his feet” or even worse, be spontaneous rather than scripted. No gain there for a sitting pol. As you said, Pete Wilson is NO Exception to these rules nor intrusions upon one’s private time even while in-public and during regular business hours. ( His chief of staff was apparently absent. You said I should not expect the unexpected in regards to a politician’s social or impromptu personal conduct (in-public). I agree with some caveats. Here is my further analysis:
Let me elaborate on your prior response to my recent comment, adding my own unique perspective: “But on rare occasions, extreme events take place that are highly improbable. These are popularly referred to as “Black Swan events”, from the excellent Nassim Taleb book “The Black Swan: The Impact of the Highly Improbable”. And we’ve all experienced at least a few global Black Swans, from the Covid-19 pandemic to the global financial meltdown in 2008 to the 9/11 attacks more than two decades ago. They can happen at any time, such as the stock market crash of Oct. 1929, for example! Life has unexpected risks no matter how much we try to schedule or avoid them.
The mere idea of some extreme Black Swan events can be almost seductive… hence why Hollywood has been cranking out so many Black Swan themed projects of late”.
Might the unexpected meeting of a donor at a fine restaurant or even a “nobody” be taken as a black swan event which inherently made a conservative and conventionally-minded politician like Pete Wilson more than a little uneasy, as I clearly observed? In that moment, the real Pete Wilson was “naked” and subconsciously, he well knew it too!!
I know it was so in my gut right then and there as I observed the way Pete Wilson handled a momentary, impromptu intrusion in his workday planned routine ( his non-verbal messaging was not something he could conceal, which is why such a situation is viewed as high risk to be avoided by most any POL).. You commented on 6/15: ” Few act differently than Pete Wilson did that day.”
In-context, might the “unexpected” you referred to or at least the unplanned, be received by any sitting politician at his level (as Governor) as possibly the equivalent of a “black swan event” to be avoided if at all possible? I strongly suspect so. Remember the “Medfly crisis” that effectively ended then Gov. Jerry Brown’s political career for many years after 1979?? Gov. “Moonbeam” had a lunar eclipse of sorts. In-contrast, Pete Wilson’s career petered-out after his two terms in-office. Like many former pols of both parties, Pete Wilson entered the lucrative world of political consulting.
So, the real Pete Wilson came though loud and clear on that one day: a self-serving, rather arrogant Asshole. No doubt about it. That is in-fact, exactly what Pete Wilson the man really is “behind closed doors” and I saw it first hand. Your comment suggested most of his peers are likewise, My personal perception at least.
H.Craig Bradley
LikeLike
Thank you again, Craig.
Like actors, politicians are not “show ponies,” always avaliable to the public to use and abuse.
With due respect to you and your father, Pete Wilson didn’t need either of you, and probably cared less about what you two thought.
I have been on first-class flights too many times to count, with famous people. On one occasion, Lionel Richie and his wife/female companion were seated opposite me.
As you may recall, he headlined the closing ceremony of the last Olympics in LA — my kids and I were there — and was brilliant. Apparently he will perform at the upcoming Olympics in LA.
The thought never crossed my mind to intrude on his privacy. Indeed, it would have been rude. When I produced concerts, I never intruded on the privacy of the performers.
Having been raised in LA, I have been around many famous people. The same thing is true of Washington, D.C. At no time did I need my ego “flattered.” And yes, I met with Pete Wilson when he was a U.S. Senator, but it was strictly business.
Lastly, I grew up around many famous people, or the children of many famous people. My parents knew them too. I was taught “manners,” and I did not intrude on their privacy.
LikeLike
One more item about Peter B. Wilson:
While a U.S. Senator a constituency requested he support the granting of official POW status for the former Captain and Crew of the U.S.S. Pueblo, taken into custody by North Koreans in 1968-1969. A Korean Naval gunboat took the vessel prisoner in North Korean waters but Capt. Buchner was treated as a pariah for years afterwards by the Navy.
I recall but could not goggle any reference to this story but I recall reading about it in a long past issue of the L.A. Times in the early nineties. In-fact, Pete Wilson REFUSED to help the families of the crew who needed medical treatments later as a result of their captivity. POW status results in additional medical benefits and care. He was a scrooge. Now look at our National Debt? Meaningless petty politics in my opinion.
This is what I mean about Pete B. Wilson in-particular. By the way, his second wife, Gale reportedly organizes his wardrobe every morning, laying-out his cloths for the day on his bed. My late Aunt in Rancho Santa Fe knew Gale Wilson personally, so its not just a rumor, rather a fact.
Everything Senator Pete Wilson did was a calculated trade-off, always in his personal favor, of course. King Wilson. King Newsom. Not fundamentally that different in principle or character with West Virginia Senator Joe Manchin who held-out for months before supporting last year’s “Inflation” Reduction Bill. Everyone has their price although I must say Pete Wilson can be quite idiosyncratic at times about what he will or will not support. His prerogative, just like any other politician or Senator for that matter. People can and often are complex, which is why I don’t much like any of them as a citizen. Bill O’Reilly, a lifetime resident of the Big Apple, has commented that over the last 35 years, U.S. Senator Chuck Schumer has never done even one favor for a New York (City) resident. He is a friend of Wall Street and the Big Money Boys (his supporters and financial contributors), sure not “the ordinary people” of New York State. Another (Corrupt) Asshole? For sure an elitist. Its why people dislike our politicans so much, I suspect.
H.Craig Bradley
LikeLike
Again, Craig, to make snap judgments about anyone is not wise or preferred. Imagine if someone did that with respect to you, without knowing you.
Second, the Pueblo incident was a mess.
See, e.g., https://en.wikipedia.org/wiki/USS_Pueblo_(AGER-2) (“USS Pueblo (AGER-2)”)
Third, having headed the staff of a U.S. Senator — who had been Massachusetts’ Attorney General, and the first African-American Senator since Reconstruction after our Civil War — we did not guard his persona. Indeed, our offices in the Russell Senate Office Building were next to those of Ted Kennedy; who was not guarded either, despite having lost two brothers to assassins.
Next, I doubt that Pete Wilson cared one iota about you or your father.
Lastly, everyone is entitled to their privacy: you, your father, Pete Wilson, Lionel Richie . . . everyone.
LikeLike
I can and do come to my own conclusions, as do you and most other people, as well. I may not agree but sometimes agreement is not required nor necessary in life.
As far as Senators opinions of myself or any others, its really one big nothing burger to me. As a matter-of-fact, lawyer Pete B. Wilson owned my family nothing whatsoever in this world and vice versa. Isn’t that fair enough? I believe it is. Ditto with other Senators such as Senator Chuck Schumer or even Senator Joe Biden back in the day, as well. I think my view is quite reasonable. Often, Politics is seen as more about transactions as reflected by the statement: “I already paid you” LOL
I’ll say this, while I worked on a National Forest in Western Colorado in the early eighties (White River Nat’l Forest). The Deputy Forest Supervisor was named Robert Bob Lynn. He was kind of an asshole too although I never had occasion to cross him.. His nickname was “weasel” amongst some of the Forest employees. Bob Lynn had a noticeable if not odd mannerism though: tongue protrusion, similar to a viper’s forked tongue. ( I am not sure psychologically why he had this particular, rather annoying habit). Any pit viper does it similarly but for a different purpose, more as a way to sense its surroundings while looking for prey species). Bob’s job was to question everybody and everything and take the necessary actions such as “kick some ass”. He never did anyone any favors either. Not very popular with the other forest employees he oversaw. Hard-nosed, just like Pete Wilson. So, I can and will make one “snap” judgement and I am going to stick with it: Peter B. Wilson has a well developed sense of self-awareness. Actually, most successful career politicans probably do, as well. ( Not quite sure if President Trump did, at least in the same way). Interestingly, Adolph Hitler was reportedly meticulous in maintaining a particular public image to the German people: always serious & confident in-public and on-camera. No fooling around either. However, he had some off-camera moments according to historical photographs which depicted an entirely different aspect of Hitler’s “personality”, even a funny one now and then. This was the real, Private Adolph Hitler. As I said before, people can and often are very complicated and at the same time deceptive. Hard to tell the real man. It has often been said the best thing to be is yourself, but many people still wear rhetorical “masks” and go to great lengths to hide their real personality from most others and strangers, as well. That is about as deep a psychoanalyst as I want to be.
Politicians instinctively know better than to be seen for who they really are. (They often need a good “poker face” ). However, I do regard the late President Ronald Reagan as very authentic. What you saw is what you got: Old style Conservative; the real deal. It made him very popular and powerful; a really good president.
Its self-evident at least to my way of thinking, based upon what went on that one fine day @ the Old Bel Air Inn and Restaurant. I think my insights at this stage of life are spot-on, but if you disagree, then go ahead and disagree. Fine. I feel I am right on this call regardless and can live with it.
H.Craig Bradley
LikeLike
Everyone has their own opinions; and each views life through a prism.
LikeLike