economics

The Fall of Disney

Disney has announced that it will be closing its Star Wars themed hotel. The concept of the hotel was complex, and shows a complete lack of awareness of your customer base. The idea was that the hotel would be like living on a space faring cruise ship. The experience was to be totally immersive.

There were problems with the concept that doomed it to failure from the beginning, and these problems would have been easy to spot, if only someone had discussed it with actual people. The biggest problem is the cost: $1,200 per night for the first two adult guests. For additional guests staying in the same cabin, it would be $500 per night for a child, and $700 per night for an adult. To compare, taking a comparable cruise on a conventional cruise ship with complementary alcohol, internet service, and a personal butler costs about half that. The extra cost is for the Star Wars experience.

So what is this experience? It is focused on the time period of the latest Disney versions of the Star Wars franchise. You know, the movies that only the biggest Star Wars geeks follow with enough excitement to go to this hotel. The characters from the original George Lucas time period don’t exist in this time period, so many original Star Wars fans, most notably the older ones with the money to stay here, won’t recognize many of the characters. The very nature of the hotel limited your customer base, which was already limited by the high cost.

As a hotel instead of an experience, it was a total bomb. There was no swimming pool, no gym, nothing but an extended, expensive cosplay of a movie franchise. For this business to be successful, there has to exist a large enough subset of people who are big enough fans of the movies that are able and willing to spend more than $1,000 a night to cosplay a movie while staying in a crappy hotel.

There just aren’t enough people who are large enough fans to do that at a $1k per night price point. Had Disney executives done a simple market survey, this would have been apparent. The failure of this hotel is a microcosm of the failure of Disney as a company.

There is a lot of talk about Disney and Ron DeSantis’ feud, and many are saying that Disney announcing layoffs and cancelling their projects in the Orlando area are signs that Florida’s governor is losing the battle. That’s BS. The real issue, and reason for these cutbacks, is that the current executives are woke morons with no real business sense. They are taking a company that made its mark, and became an industry giant, by selling family friendly entertainment.

Disney once made wholesome entertainment, beginning in the 1940’s with the classic animated stories like those of Snow White, Pinocchio, Dumbo, and Bambi. Then the 1950’s and 60’s saw the company continue with animated movies, but also told live action stories like Treasure Island, The Absent Minded Professor, Swiss Family Robinson, 20,000 Leagues Under The Sea, and Old Yeller. Over the years, we saw other wholesome movies like the Apple Dumpling Gang, the series of films like Herbie the Love Bug, and Escape to Witch Mountain. The films of Disney were so family oriented, that the company’s first film to not be rated G was the 1979 film The Black Hole.

We moved to Florida in 1972, when my father, who worked as an early computer engineer for Hewlett Packard, was sent there to support the new tech boom in Central Florida. I visited the Disney complex for most of my life. I grew up around Disney and its theme parks. On two different occasions, I worked for the company. Once when in high school flipping burgers and loading people on the attractions of Horizons and World of Motion, and again years later as a repair technician, repairing dancing chickens at Splash Mountain.

I raised my own kids on Disney movies: The Lion King, Aladdin, the Little Mermaid, Toy Story, and Monsters, Inc.– Disney was still making quality entertainment that families could enjoy well into the new century. Even as an adult, I used to pay to enter the parks to see attractions like the Osborne Family Christmas lights. I would go to see the Christmas decorations and sip some hot cocoa while listening to Christmas music. It was relaxing to escape and see some wholesome entertainment.

Disney has changed so much from those early, family friendly years. The cracks began with the rise of what is called “Gay Days.” In 1991, a large group of about 3,000 homosexuals flooded the park while wearing red shirts. It wasn’t a company sponsored thing. That would change over the years, and by the end of the ‘oughts, the event would grow to be a company sponsored event with 150,000 flooding a family friendly park with sexual messages- all aimed at kids.

Now the company has broken with its former self, and spends time producing many films that are no longer aimed at families. Now they are aimed at sending a political and sexual message to kids. From changing old characters to new, sexualized ones, the new “woke” Disney is more aimed at destroying the family than it is at celebrating it. There was a time that Disney jealously guarded its reputation. That time is gone.

That’s why the Disney hotel failed, and that’s why the Disney company is underperforming. The company has lost its way. If the company is to be saved, the brand has to return to its family friendly, wholesome roots.

By Divemedic, ago

Anthony Oliver & Economic Literacy

Is economically illiterate. He cancelled his show because he won’t do it unless he is paid $120,000, with the venue only charging $25 a ticket.

Don’t buy Cotton Eyed Joe tickets for $99 apiece. Sure as hell don’t buy tickets for VIP passes for whatever bulls–t prices they’re on. Don’t pay $100 for a ticket. If we’ve got to cancel the venue and play somewhere else, we will

Unfortunately this kind of economic self sabotage is common:

  • Complains about poverty
  • Doesn’t understand money
  • Demands $120,000 for a 60 min performance
  • Cancels the performance he agreed to do because he thinks ticket price is too high

The venue only holds 1,500 people. Oliver’s take costs the venue $80 for each ticket, assuming that the show is sold out. He moved the concert to a larger venue (Knoxville Convention Center) which holds 10,000 people. Now his take costs $12 per ticket. The rest of the costs of the venue, as well as profit for the venue, have to come from the other $13.

Do you think he learned about economy of scale? Or does he still not understand how money works?

Economic illiteracy is why so many people don’t understand why it is that a business needs to increase prices. That’s why you see people complaining when fast food prices rise. This guy is upset that it cost him to buy 18 items for 4 people at Taco Bell, and it cost him $53.

It isn’t greed, it’s increased costs. We told you that raising the minimum wage would come back to bite you in the ass. Now it has. That’s just economics. The increased costs of wage hikes, combined with inflation caused by poor monetary policy has made everything cost more.

I am in the middle of setting my rent for the coming listing. Since 2020 when I first rented to this tenant, my costs have increased by 22%. (11 percent per year) Over that same period, I have increased rent by 20%. (ten percent per year) For the coming year that begins October 1:

  • my landscaping cost will be increasing by 13%
  • Property taxes are increasing by 10%
  • I’m waiting to see what will happen with my insurance. That bill comes any day now.

Now that the tenants are moving out, I am free to set my rent to market rate. I think that will be somewhere around a 12-15% increase. Maybe more.

Things like this happen, and people don’t understand why prices had to increase. I run a business. Any well run business will tell you that prices are determined by costs. If my costs exceed what I can charge in prices, then the business will go under. People are the same- you are selling a product. Your labor. What you can charge for that labor is dependent upon its value. If you don’t like the wages that you are making, you need to find a way to make your labor more valuable. If not, the customer who has been purchasing your labor will find a way to buy from someone else, or won’t buy it at all.

This also explains why so many people are poor. They don’t understand economics, money, or how to run a business. Many people can’t even balance a checkbook. How can you run the business of your life when you don’t understand money?

By Divemedic, ago

Tenants and Bankruptcy

Although he was posting under a fake name because he was trying to evade a ban and is thus a complete asshole, Hedge (posting as “TheMan”) raised an interesting point, one that I am sure he didn’t seriously intend.

When you file bankruptcy in Florida, the automatic stay will protect you from eviction unless:

  • The landlord received a judgment of possession prior to the filing of the bankruptcy. A judgment of possession is the final court court order in an eviction proceeding. When this order is signed by the judge, the tenant is officially evicted and the landlord may take possession by legal means. The judgment of possession extinguishes any legal right the tenant had in the lease, thus there are no further actions to stay. If the order was not signed before the bankruptcy is filed, the automatic stay will stop the case from proceeding.
  • The landlord files a motion with the court stating the tenant has damaged the property or the tenant has used illegal drugs on the property within the past 30 days, the tenant will have to respond or the stay will be lifted, and the debtor will be fully subject to ALL of their creditors’ actions to collect debt. If the tenant responds, the court will decide after a hearing. Since Bankruptcy Court is a FEDERAL court, and marijuana remains illegal (for now) at a Federal level, weed is enough to meet this standard. If your tenant has a weed card, you can get their stay lifted.
  • If the tenant does not make lease payments due AFTER filing bankruptcy, the landlord will be able to get the stay lifted.
  • If the tenant does not cure the default on the lease (pay past due rent due before the filing) within a reasonable time, the landlord will be able to get the stay lifted.

A tenant filing Bankruptcy is actually good news, because you know that you are going to get paid from that point forward, with the power of a Federal Bankruptcy court behind you.

By Divemedic, ago

Creative Accounting

A blog post from WIrecutter over at Knuckledraggin My Life Away brings us a story about how California landlords are charging fees for parking spots, trash pickup, pest control, use of a mailbox and routine maintenance requests everything they can think of. This is the only sensible response that landlords (or any business) has when a government has inflationary policies coupled with price controls.

The entire situation was created with the double whammy of the eviction moratorium and tax increases. In my area, you can add large increases to property insurance. Any business that has increased costs must recoup those costs by increasing prices. The government responded to that by enacting price controls (rent control). In places all over the nation, landlords are being told what they can charge for rent, even as the costs like property taxes, interest rates, and insurance continue to climb.

So landlords are responding in exactly the way that I predicted they would- they are looking for new revenue streams by charging for perks that used to be gratis. Here is what I said on the matter nearly two years ago when communities in Florida were talking about rent control:

If rent control is enacted, there are steps I can take: Each year, I will raise rents by the highest permitted under the new law. On top of that:

– I will no longer provide lawn service as a part of rent. That will shift $900 a year of expense to the tenant.
– I will no longer provide a free washer and dryer. I will recommend a company that will rent the tenant one at an additional cost, if they don’t have one. That company will be owned by me. The going rate for that is $144 a month.
– I currently pressure wash the outside of the property twice a year. I can push that off to the tenant, and make it their responsibility as a part of cleaning.
There are many ways that I can maintain profitability. Just taking the three steps above will have the effect of increasing the cost of renting by 15 percent without increasing the rent itself.

Landlords will have to be creative.

The list is endless. I can have parking stickers made, and I can charge you $15 per month for each sticker. Any car parked on the property had better have a sticker, or there will be a $50 fee charged per day for not having a sticker. If the fee isn’t paid, cars without stickers will be towed. I’m not a jerk, though. Parking in the garage will still be included in the rent.

I offer my tenants a lot of free perks- washer and dryer, lawn and pest control, all included in rent. Many landlords offer similar perks. Some rent furnished homes and include the furniture in the rent. I can see rent for furniture being an extra fee. Perhaps extra fees for things like a refrigerator, a stove, or a dishwasher. Florida law requires rental properties to have functional heating, but not air conditioning. There can be extra fees charged for use of the air conditioner.

This is a situation that was created entirely by government. Businesses respond in a rational way to price controls and increasing costs. Government officials and idiot liberals don’t seem to understand that.

By Divemedic, ago

I can’t think of a title

Retards who don’t understand economics have this saying:

The carpenter can’t run out of inches

The stadium can’t run out of points

The airline can’t run out of FF miles

And the USA can’t run out of dollars

Inches are a unit of measurement. The carpenter is using that measurement to count how much lumber he has. He can’t run out of inches, but he can run out of wood.

Points are a unit of measure. It is a way for sporting events to measure the success of the team in achieving it’s objective. The stadium can’t run out of points, but teams can be unsuccessful and not receive any.

At a macroeconomic level, money is also a unit of measurement. What the morons who support modern monetary theory don’t understand is that the money in circulation is a measure of a nation’s productivity. If the total of all goods and services produced by a country is far exceeded by the money in circulation, that money becomes worth less, and you get inflation.

Let’s illustrate this by pretending that the US government has just mailed a check to everyone in the country in the amount of ten million dollars. Now everyone has millions of dollars and has just decided to retire. Cool.

Now where are we going to get food from? The guy that used to work at the grocery store, or the woman who worked at the coffee shop no longer works there. Everyone has money, but nothing to eat. At this point, food has far more value than does money, and your $2 can of soup now costs $100,000 because no one is making any more of them.

That’s why seeing things like this really makes me shake my head in wonderment:

Universal Basic Income is basically what we had during COVID. Everyone received tons of money. They got free checks, free PPP loans, the government was basically dropping cash from helicopters- about $5 trillion dollars hit the US economy. Everyone got three checks totaling $3,000 or more in the space of a year. What did that do?

Inflation.

Universal Basic Income (UBI) would be like that, but on steroids. They want everyone in the nation to get checks from the government of $12,000 a year- 4 times as much as was sent out during COVID. Now ask yourself what will happen when this is happening on a constant basis.

Tyrone and Shaniqua will take their checks and try to buy some ribs and gold toofuses. The problem is that this massive outlay of money means that everyone wants ribs and gold. So the cost of ribs and gold, as well as everything else, will skyrocket.

The people who are poor will still be poor, despite the fact that there are more zeroes in their bank account. It’s just that so many people in this country are completely ignorant of this fact.

You better hope that the government runs out of inches, because they are going to be giving you every one of those inches, good and hard. Robin and Jessica won’t be the only ones getting fed those inches.

By Divemedic, ago

Shorting

Another data point that a government engineered economic downturn is coming. Congressional finance committee members are shorting the stock market. They are buying PSQ, HDGE, and SH. All are funds that short major indices in the market. This indicates that Congressional Financial Committee members are anticipating an economic downturn.

Why? What do they know?

By Divemedic, ago

Property Appraiser Answer- UPDATE @1350

The county property appraiser has answered my request to increase the market value of the house. They think that I am nuts because I am essentially asking them to increase my taxes. That is wrong in any event. Because of Save Our Homes, my assessed value can’t increase by more than 3% if I stay here, and if I move it actually cuts the taxes in my new home, because it maximizes my SOH credit.

Thank you for contacting our office. I want to make you aware that the value assigned by our office is for tax purposes only, and is not reflective of the resale value of your home. You want this value to be as low as possible. The value we arrived at is what you will pay taxes on. Did this answer your question?

If they had half a brain they would see what we are doing here.

EDITED TO ADD: I told them that I still want my value increased. They replied:

So let me understand your email more accurately: You are requesting that we raise your property taxes?

Now my wife is nervous and says “Are we sure that we know what we are doing here?”

Yes, I am. The Save Our Homes Credit is portable, and increasing the market value on our current home will reduce our taxes in the new house by about $2200 a year.

By Divemedic, ago

What is Save Our Homes?

In 1992, Florida voters were worried about runaway property values causing drastic increases in property taxes from one year to the next. With so many people wanting to move here, property values were climbing rapidly, and this was causing property taxes to skyrocket. Amendment 10 was proposed, which is a benefit of the homestead exemption that provides homeowners protection by limiting the maximum that the assessed value of their home for tax purposes can be raised to 3%, or the CPI, whichever is lower. The Amendment to the state constitution passed, and it became the law of the land in 1995.

How does it work? Like anything that relates to taxes and the government, there is a lot of confusing math involved. Let’s say that you live in a taxing district that taxes your property at a rate of 10 mils, and you bought a starter house at #1 First Ave. for $75,000 in 1993. At the time, the state of Florida had a $25,0000 homestead exemption. You would then owe 10 mils on the $50,000 taxable value of the home, or $500 in property tax each year. Your house was valued at $80,000 in 1994, and you paid $550 in taxes for 1994.

A housing boom hits, prices go way up, and by 1995 your home is now valued at $100,000. Your tax bill would have been $750 (a 50% increase from just 2 years before), but save our homes had gone into effect, so the increase in your home’s assessed value only went from $80,000 to $82,400. That means your property tax was only increased to $574.

Eight more years go by, and you decide in 2003 that you want to sell. Your home is now worth $145,000. Of course, save our homes only has you paying taxes on the assessed value of $104,000, minus your homestead exemption, making your tax bill $790 for the year. Anyhow, you get $150,000 for the place. The tax assessor still says it’s worth $145k, and the guy who buys it will have to pay $1200 in taxes in 2004, assuming the value stays at $145k. (you already paid 2003’s taxes)

You, however, bought your second house at #2 Second Street. You were able to get this one for $240,000. Your portable SOH credit was (145,000-104,000=41,000) so even though the tax guy says this place has a market value of $220,000, you will only have to pay taxes on (220,000-41,000-25,000), making your tax bill $1,540.

Then in 2008, voters approved an amendment that increased the homestead exemption to $50,000 for the non-school portion of property taxes. This complicated things even more, but that is a different topic.

Why do these Amendments keep getting voted on? Whenever the Democrats want more voter turnout, they make sure that something of interest to Democrat voters that will drive voter turnout is on the ballot. Tax cuts in property taxes, legalizing marijuana, increasing the minimum wage, saving baby pigs from the slaughterhouse, things like that.

By Divemedic, ago

Lawyers: Expensive, but Worth It

There is an old saying: a person who is acting as their own attorney has a fool for a client and an incompetent attorney. In this case, we are talking about real estate taxes. We are in the midst of buying a new home. There are a lot of expenses to consider with a move, and taxes are one of them, especially in Florida. Understanding how Florida computes real estate taxes is important, if you want to pay as little in taxes as possible.

This paragraph is specific to how Florida computes real estate taxes. If you aren’t interested in the mechanics of that, you can skip to the next paragraph. When you own real estate in Florida, the county property appraiser assigns your property a “market value” each year. If you live in your home, you can claim it as your homestead, and every year after the first year that you own it, the value can only increase by 3% for taxing purposes, and this amount is called your “assessed value.” The difference between the market and assessed value is called your “Save Our Homes” credit. You subtract your Save Our Homes credit from your market value to arrive at the assessed value, then your homestead exemption ($50,000) from your assessed value, and that is your “taxable value.” The taxing authority where the real estate is located then taxes you on that value, and the amount of tax you own varies by taxing district. (I know that this sounds complicated and it is, but the end result is that there are only 9 states in the US that have a lower tax burden than Florida (we are tied with Louisiana), so there is that.) The reason that I explain this is because the “Save Our Homes” credit is portable, and this is important when moving.

What’s important here is that, when you are moving, you want your old house to be valued as high as possible, and your new house to be valued as low as possible. This will minimize your property taxes going forward. Since we are preparing to move, I got our current home appraised and sent a copy of that appraisal to the county property appraiser’s office. Each August, the appraiser’s office sends every homeowner a copy of the proposed numbers, and you have until September 15 to appeal these numbers. The appraisal that we got from the county was almost $100k less than what the our private appraiser says it is worth. Since this is how our tax credits are calculated, I need to get this fixed, because allowing this to stand will increase our property taxes on the new house by about $2,200 a year for the entire time we own the place.

To do that, you need to apply to the Value Adjustment Board. It’s a sort of tax court that is run by a county magistrate. It’s a legal process, and I think that it is worth our money to hire a real estate tax attorney to handle the process. My wife wants to just do it ourselves because she says lawyers are expensive. My point to her is that we only get one chance to get this right, and screwing it up will cost us more than $22,000 over the next ten years in taxes that we otherwise wouldn’t have to pay. If it costs a grand or two now, a lawyer is well worth the cost going into the future.

By Divemedic, ago

Shrinkflation

Another example of how inflation is getting us in ways we hardly notice. Just a year ago, Hostess Ding Dongs came 12 snack cakes to a box of 17 ounces, making them about 1.4 ounces per snack cake:

Now those same cakes are 10 to a box of 12.7 ounces, making each cake 1.27 ounces. The cakes are smaller, there are fewer of them, and now you pay more to get 25% less.

By Divemedic, ago