From The Fields

Spirit Airlines was the no frills airline that baited people with low cost tickets and then charged exorbitant amounts if you wanted to actually take luggage with you, ($99 at the gate for both checked bags and carry on bags) They recently declared bankruptcy. Good. The airplanes they flew are still flyable. Another airline will probably buy the planes out of bankruptcy and figure out how to make money flying them. Even more importantly, declaring bankruptcy will effectively prevent a $500 million federal bailout of this sorry air carrier. Yes, the Trump administration was seriously considering adding Spirit to its portfolio of investments in investor owned companies. You know, companies like Intel, MP Materials, Lithium Americas, Trilogy Metals, U.S. Steel, USA Rare Earth, Westinghouse, Vulcan Elements, xLight, L3 Harris Technologies, and according to some reports, the largest company in the world, Invidia. Luckily the bondholders of Spirit nixed the deal.

And Spirit would just have been the foot in the door for bailouts for other similar budget airlines; Allegiant Air, Avelo Airlines, Frontier Airlines and Sun Country Airlines. They had their hands out for $2.5 billion in taxpayer investment money. For the time being this incipient nationalization of our country's airlines has been nipped in the bud.

Ironically, a large part of the reason all these companies went begging to the Feds for support was unforeseen (maybe) results of previous government policy. The Trump tariffs, particularly on China, led China to retaliate by limiting exports of rare earth elements, you know, essential materials for manufacturing modern weapons and aircraft, not to mention your mobile phone. So the U.S. had to grow a rare earth industry from essentially nothing. In the case of the airlines, the Fed-caused problem is the rapidly rising cost of jet fuel caused by the effective closure of the Strait of Hormuz. Caused, of course, by Trump's egregiously unconstitutional war on Iran.

It's really remarkable how ignorance of history leads politicians to follow the same stupid policies over and over again. The post-WWII labor government in Great Britain decided that it would be a great idea to nationalize huge parts of the British economy. That's textbook socialism. You know, ownership of the means of production by the people. Which really means the government. Never ends up well. In Britain it took the radical capitalism of Margaret Thatcher to turn the country around. Now Britain is starting to make many of the same mistakes. Again. In Argentina it took the radical libertarianism of Javier Milie to turn around decades of economic ruin under the socialist Peronistas.

A turnaround from incipient socialism/fascism is urgently needed in America. It can't happen too soon. But it probably won't unless the plurality of Americans with broadly libertarian values start to vote for good candidates for public office rather than the lesser of two evils. Voting for evil is not a winning proposition. That's this week's Report From the Fields. I'm Richard Fields. See you again next week.

Marilyn Monroe owned a 2,300 square foot Brentwood Spanish bungalow in Los Angeles for about six months prior to her death in 1962. Since then the home has had 14 different owners and is in a seriously deteriorating condition. Brinah Milstein and Roy Bank bought the property for $8 million in 2023. Their plan was to demolish the rundown structures and redevelop the site. The city of Los Angeles issued the proper demolition and grading permits on September 7, 2023. Exactly one day later, the city of LA began the process of declaring the site a historical monument. They were reacting to pressure from Marilyn Monroe fans and historians. That means, in the words of non-profit public interest law firm Pacific Legal Foundation lawyer David Breemer, "They couldn't demolish, couldn't repair, couldn't build and couldn't sell to someone who could. The city had effectively turned their property from private property into a public monument without paying for it." In the years prior to PLF joining their legal fight, Milstein and Bank have spent millions on attorney fees, hundreds of thousands in added security costs and more than $100,000 per year in property taxes. Full disclosure, note that John Cameron and I both once worked at PLF.

If Marilyn Monroe fans and historians are really interested in preserving Marilyn Monroe's last home, they should put their money where their mouth is and buy the house for a fair market price from a willing seller.

This is worse than a public taking under eminent domain laws. At least with eminent domain, property owners who are unwilling sellers are compensated for the fair market value of their property. When one is the "owner" of a historical monument that cost $8 million and counting, how can one possibly make any return at all on one's investment? Elvis Presley's Graceland gives tours for $85 per person. On the very ambitious assumption that a house where Marilyn Monroe lived for six months could command that price, and assuming 10 people per hour, 8 hours a day, seven days a week would actually show up, the annual gross would be under $2.5 million. Subtract the aforementioned property taxes, insurance, security, employees with benefits and other costs, it would take years and years just to get your investment back, not to mention actually show a profit. And that's assuming LA would actually be willing to let you sell tours to your historical monument. Does that seem likely? After all, most historical monuments in the LA area are free; the Hollywood sign, the Santa Monica pier, the BRICK, the El Pueblo de Los Angeles Historical Monument and Griffith Observatory all offer free admission.

The overriding problem is that the city of Los Angeles, not to mention San Francisco, the California Coastal Commission and indeed the state as a whole have essentially no respect for property rights. Instead they have contempt. Unless the property owners are crony capitalists who fund their election campaigns. See all the new high rises along the "historic" Sunset Strip.

Consider that the Palisades and Eaton fires last year destroyed over 16,000 structures last year in LA County. Mostly homes. The number of rebuilding permits that have been issued is less than 3,000. Only 28 homes have been actually fully reconstructed. That's not just contempt for the people who lost their homes. That's cruelty. That's this week's Report From the Fields. I'm Richard Fields. See you again next week.

The Trump administration's Department of Justice has indicted the Southern Poverty Law Center on 11 counts of bank fraud, money laundering and wire fraud. We've learned that Trump, like Biden before him, has weaponized the DOJ so we do need to take this news with at least a half a grain of salt. Still the charges seem a little too specific to just be made up. Specifically, the SPLC is charged with creating phony shell companies with no real businesses like "Rare Books Warehouse" and "Fox Photography". They allegedly set up bank accounts for those so-called businesses and transferred money to them. From those business bank accounts alleged payments were made to individuals in various hate groups like the KKK, the National Socialist Party of America and Aryan Nations. All very interesting because the SPLC supposedly sued the KKK into bankruptcy back in the 1980s and Aryan Nations and the National Socialist Party of America reportedly no longer exist according to my AI search of legacy media.

Nonetheless the SPLC's defense of the money changing hands is interesting. They don't deny funding people in hate groups. They claim they were actually just paying informants from the hate community. Maybe. But without hate groups to use for fundraising, their ability to raise money from donors might be just a little less. It's also informative to peruse their website and take a look at all the people who have earned SPLC's hate label. Tucker Carlson, Dennis Prager, Matt Walsh, Michael Flynn, Larry Platt of Gun Owners of America, Charles Murray the author of The Bell Curve, and Bo Gritz, supposedly the inspiration for Rambo. There are 250+ people and organizations listed as haters. Most of them have rightfully earned the label. I don't like them either. But they still have free speech rights. And, for a lot of them the only thing that qualifies them for the hate label is being too conservative or libertarian. See the aforementioned list. Tellingly, there are literally no progressive, socialist or communist organizations on their extensive list. You know, the kind of organizations that yearn to control governments so they can make everyone do their bidding. Would-be tyrants.

You'd think that an entity set up as a nonprofit charity that allegedly engages in shenagens like funding the people and groups they supposedly hate, to the tune of about $3 million, might have credibility problems. But a quick perusal of Charity Navigator, the organization that rates nonprofits, still gives SPLC a nearly perfect 98% 4-star rating. Go figure. I'm Richard Fields and that's this Report From the Fields. See you again next week.

My intention was to do a Report on the effects of California's minimum wage law or the successful round the moon mission of Artemis this week. But once again the follies of Trump and Netanyahu's war of choice in Iran demands attention. Because it is getting more dangerous by the day. At press time, the latest development is Trump's threat to erect a naval blockade stopping the remaining trickle of shipments through the Strait of Hormuz.

Some background: In June of last year, Israel and the United States conducted Midnight Hammer, a bombing and assasination campaign against Iran. Senior Iranian nuclear scientists were killed. Trump claimed that Iran's nuclear facilities were "totally obliterated". But evidently not obliterated enough. After a visit by Netanyahu to the White House, the U.S. and Israel launched Operation Epic Fury, another attack on Iran, killing their senior leadership and further bombing nuclear, naval and military sites. But the Iranian military was strategically decentralized. They struck back with missile and drone attacks on Israel and any Arab country hosting U.S. military bases. A 550.000 barrel per day refinery in Saudi Arabia was shut down. The Saudi' vital pipeline to the Red Sea was attacked cutting capacity by 700,000 barrels per day. Refineries in Kuwait will take 3 or 4 months to bring back online. A liquid natural plant in Qatar has been shut down. Bahrain declared force majeure from one of their refineries. Oil field production has been slowed or halted in many gulf nations. Bringing it back on line will take longer than shutting it down.

Threats by Iran to attack shipping through the Strait of Hormuz between Iran and Qatar led to the effective shutdown of the Strait for use by any shipper deemed an enemy by Iran because insurance companies refused to provide insurance. About 20% of the world's petroleum shipments used to traverse the Strait. They don't anymore. In addition to oil, a significant portion of the feedstock for nitrogen fertilizer originates in the gulf states. A lack of fertilizer at a reasonable price is causing farmers in the U.S. and elsewhere to reduce plantings or suffer lower crop yields. That will ultimately lead to higher food prices...or the lack of food at affordable prices in some third world countries. Another export from Persian Gulf countries is helium. Helium is not just for party balloons. It's also a critical component in the manufacture of semiconductors.

Oil and gas are not just needed for fueling your car, heating your home or generating electricity. The nation's train and semi-trailer transportation system runs on diesel. Oil is necessary to produce plastics. A higher oil price makes pretty much everything more expensive. We've already seen the March Consumer Price Index spike to 3.3% from 2.4% in February. That's a 37% increase in one month. With the Strait closed on one end by Iran and on the other end by Trump, energy is about to get a lot more expensive. And so will everything else.

But that's not the least of our worries. With Shiite radicals still in control in Iran and an unrestrained Caligulan in the White House threatening annihilation of a civilization, this war could get dangerous. Not just for Iran but for America. While the Iranians probably don't have the capability of making much less delivering a nuclear bomb, they almost certainly have the ability to make and detonate a dirty bomb. Maybe close to where you live. That would certainly keep the ghost of Jeffrey Epstein out of the news for a while. Let's hope it doesn't come to that. I'm Richard Fields and that's this week's Report From the Fields. See you again next week. I hope.

On April Fools Day of 2024, a $20 per hour minimum wage went into effect for fast food workers in California. So, who got pranked on April Fools a couple of years ago? First and foremost the approximately 18,000 workers who lost their fast food jobs. Secondly, consumers who are paying more for their Big Macs. How do we know this? A paper, "Did California's Fast Food Minimum Wage Reduce Employment?" by Jeffrey Clemens, Olivia Edwards and Jonathan Meers looked at the empirical data. They found that employment in California's fast food sector fell by about 3% compared to the rest of the country. That translates into about 18,000 less people employed in fast food.

The economic maxim that higher prices lead to lower demand is supported by the empirical evidence in California. And we can surmise that fast food restaurants followed the usual practice of last hired, first fired. Meaning that the lowest skilled people, those with only a tentative step on the first rung of the employment ladder are the people who suffer while their former colleagues get a pay raise.

But they are not the only ones who suffer. Consumers pay higher prices. Another paper by the same authors plus Joshua Nyuyen compared Bureau of Labor Statistics Consumer Price Indices on food away from home in 21 Metropolitan Statistical Areas. Four in California and the other 17 elsewhere in the United States.They found that the cost of food away from home cost rose approximately 3.5% more in California than in the rest of the country.

Another simple supply-demand economic axiom demonstrated. Prices for burgers went up. People ate less of them.

What we're looking at, ultimately, is the danger of politicians aiming to help people. Helping one constituency through politically messing with markets necessarily hurts other constituencies. The California fast food minimum wage increase helped the minimum wage workers lucky enough to keep their jobs by a little bit. It hurt the workers who lost their jobs a lot. It also hurt people who had to pay a little more for their fast food a little bit. It's safe to assume that the consumers most adversely affected, at least on a relative basis, are people who themselves are not high earners.

But the political axiom that helping a large constituency earns votes if the people paying for that help pay only a little bit more, is once again demonstrated.

And of course, if politicians get really motivated to "help" more workers, there are always robots to replace those workers. And they work 24 hours a day with no days off, no vacations and no sick leaves. That's this week's Report From the Fields. I'm Richard Fields. See you again next week.