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THE VIEW FROM HERE - Trump’s proposed tariffs on all foreign made films confirms former Secretary of State Rex Tillerson’s observation, “Trump is a fucking moron .“ Is that better or worse than Trump’s former economic adviser Gary Cohn’s saying that Trump is “dumb as shit”? Both Tillerson and Cohn quit the first Trump Administration because of Trump’s inability to grasp simple concepts. Americans, however, realize that Dems are worse. While 37% of Americans do not like the MAGA GOP, 30% don’t like the Woke Dems.
Rex Tillerson and Gary Cohn should meet Los Angeles City Council members if they’d like to see a on-going gaggle of morons who are as dumb as shit. For decades, the city council has engaged in a variety of frauds which relentlessly drove up the cost of housing for all Angelenos and created the Homeless Crisis. As Joel Kotkin, the US Census and others commentators in CityWatch warned, when housing becomes too expensive, those Angelenos who want to start families will be the first to move away and employers will follow them. Los Angeles no longer has even one Fortune 500 Company. Meanwhile, hordes of LA’s smartest and brightest in the Industry as well as other fields have relocated to parts East like Atlanta, Austin, Nashville. The migration of these highly prized employees allow Atlanta, etc. to attract Hollywood producers more than any tax incentives; tax breaks only sweeten the pot. (In the 1970's I was an attorney for Hee Haw back and even then Nashville treated us like royalty.) As the high housing costs drove away much of the Hollywood film industry, the support services for film and TV production has been steadily growing outside LA.
High Housing Costs Drive Employers out of LA
Home buyers do not pay Los Angeles’ fraudulently inflated costs for decent housing. Their employers have to pay. Unless the employers will pay high enough wages for their employees to find a place to live, they won’t have employees. Duh! Detached homes north of Franklin Avenue, for example, should be selling for $450,000.00 to maybe $750,000.00, but even a modest two bedroom can be $2 Million. If a family wants a modest home, it has to carry between $500,000.00 and $1.5 Million higher mortgage. Now the state is endangering all single family areas with mandating construction of Poverty Projects (Affordable Housing) withing R-1 areas. No one wants to over pay for a home only to discover in two years that it’s next to a new 6 story high rise for drug addicts. The end game of Los Angeles’ corruptionism has always been for Wall Street to transfer as much of Los Angeles’ wealth to itself. It has used a number of unfair and corrupt business practices to inflate housing costs and all of them have been described in CityWatch over the last 15 years.
Now the city’s and State’s grand solution to retain film production is to give huge tax breaks to Hollywood producers so that they will film in LA. That means everyday Angelenos will have to pay more in taxes, or the city will cut services. The city, however, is paying over $1.3 Billion per year for the Homeless Crisis which the corrupt city council and the developers caused. What is absurd is that tax breaks cannot come even close to making up for the huge extra costs and other aggravations for the Industry to stay in Los Angeles.
The Housing Shortage Did Not Cause Homelessness
The cause of the Homeless Crisis is well known but never admitted – the mass destruction of poor people’s homes in order to build more high-density units. If the city council had not approved the destruction of tens of thousands of low-end housing units, there would be no Homeless Crisis because people would not be homeless. This relationship between destroying poor people’s homes and homelessness is a concept which the city council has never mastered. It something which even Trump could understand.
If a developer tears down a rent-controlled project with 12 units in order to construct 24 to 36 units of market rate housing in their place, he will make a lot more money as he will have more units with higher rights. But, who pays the city costs of homelessness. The developers just dump them on the streets like Obama sent the factory jobs in the Rust Belt overseas and let the workers go bankrupt, lose their homes, see their sons and daughters get addicted to opioids and go to jail, while Obama gave Wall Street $15 Trillion dollars. The overall game plan is the same – screw the poor so that the super wealthy can make more money. The scam worked in LA and it worked in the Rust Belt . . . until it didn’t when the Deplorables voted for Trump. Did their conditions improve? No, of course not. The MAGA crowd still think that Donald Trump is their savior, while Angelenos cling to their corrupt politicos and believe that lack of construction caused the homeless crisis.
Trump Thinks That He Knows What’s Wrong with Hollywood
It’s foreign movies. In his own dim way, Trump seems to realize that the people making films overseas are mostly Hollywood producers because costs of doing business stateside are too high. Yep, like sky high housing costs in LA where all the behind-the-scenes industry people cannot afford a decent home. Trump believes that by raising the costs for Hollywood producers, he will force them to return to Hollywood.
Already American small businesses are being driven into BK by the proposed tariffs. So now Trump will make filming in Los Angeles prohibitively high with his absurd belief that forcing LA producers to return to LA is a good thing. If such an insane tariff were imposed, producers will abandon Los Angeles in favor of Atlanta, etc. Thus, the film industry will be going with the flow as The Whole Kit And Caboodle departs for points East.
This Week’s Milken Group’s Global Confab in Beverly Hills
If one listens to Bloomberg streaming news, one can hear endless comments about Trump and his tariffs. Trump still insists that China and other countries pay tariffs to the US Treasury and they pay so many billions that we may be able to drop the income tax. Of course, Trump is mentally ill, and we are listening to the ranting of a paranoid blowhard. Trump believes that every time you buy something, the seller is a thief who has stolen your money. Trump only pays attention to the direction the dollars go and ignores what we get in value in return. The mutual exchange of cash for goods does not become theft when the seller is overseas. Remember on January 19, 2025, the USA had the strongest economy in the entire world. Yet, the paranoid moron thinks everyone was stealing from us! Because foreigners can produce an item for less than we can in the US, like toys for the Christmas, Americans do not lose money, but rather get a greater bang for their buck.
Kravis Roberts (KKR) Warn -- Trump Is Killing Opportunity in the US
Tariffs, correctly understood, can be wise, but in the hands of an infant man-child with no understanding how tariffs function, they can destroy the world’s economy. Except!!! Except the world will not allow Trump to destroy the world’s economy, as we learn from KKR at the Milken confab. KKR was founded and is headed by two cousins Henry Kravis and George Roberts. Here’s my interpretation of their May 5, 2025, Milken interview.
The United States lacks the sechel or the will to restrain Trump. The beneficiary of Trump’s madness will be Europe. That’s why Roberts intoned Queen Elizabeth, “Stay calm and carry on,” while Kravis says investment opportunities are in Europe. In other words, they’ve written off the US. Kravis also counsels to stop listening to the furor as no one is going to do anything to reign in Trump. Kravis knows that one has to look at facts, and he and Roberts are in an excellent position to know the pertinent facts. More importantly, Kravis knows that facts alone are meaningless unless one comprehends where they lead. Each event arises from prior events and will in turn give rise to future events. Understanding key relationships is crucial to managing risk.
In a polarized America, each political party cares naught for facts because only their narrative counts. Lies, half-truth, and inanities, however, become the basis for whatever conclusion they desire. Kravis and Roberts have no narrative to spin and that makes advice so frightening. Trump will not be stopped, and opportunity will be killed in the United States.
When Trump had mentioned Kravis for his Secretary of Treasury in this second administration, Kravis replied to the rumor, “While I’m honored to be mentioned, I love my job and can’t imagine leaving it.” Sometimes, it is wisest to listen to the guys who speak most softly.
(Richard Lee Abrams has been an attorney, a Realtor and community relations consultant as well as a CityWatch contributor. You may email him at [email protected])
