Monday, June 29, 2009

Government is Not Our Friend Part IV

In my continue rant of why the government is not our friends as business brokers I'm going to write about what regulations and laws do to the little guy who is simply trying to make a living.

But before I write futher, I want to share a message I received from a prominent Tax CPA in Los Angeles. He writes me this story:

"..the real problems that require resolution to the State problems are to reduce the waste in government - the week before I left I was involved in working with a client on doing work for the City of Moorpark. He normally pays his workers between $12 - $18 dollars an hour which is the prevailing wage in his industry. The City of Moorpark would not sign the contract unless his workers were paid what they considered prevailing wage which was $42.00 an hour. He rebid the contract at that labor rate and was awarded the contract which cost the City an additional $12k for something he was willing to do at the lower price."

There is another example of some brainless bureucrat (remember definition of bureucrat - mindless official) following some rediculous regulation or law which some other bureucrat enacted costing us tax payer big bucks!

Regulations and laws hurt the little guy and helps the monoplies. It hurts the little guy by increasing the hurdle or cost to enter into a particular market. Big companies love regulations and laws because it prevents entreprenuers from chipping away at the big boys on the block. It slows innovation and progress down because it prevents new ideas and approaches to business to freely enter the marketplace. It prevents the spawning on new companies that would otherwise employ millions but for mindless burdensome regulations.

In business brokerage we're faced with constant delays due to regulations and laws which I've pointed out in my prior blogs. Time kills deals. And the state is killing deals because they just can't seem to get out of the pockets of the special interests and run this state like a business. They are running it like a whore house handing out money to any one who wants to buy out our elected officials and by mindless bureucrats who refuse to change, who refuse to revisit their organizations to figure out how to best reduce costs and provide better, less regulated, services to the very people who give them their jobs.

We need a darn revolt in this state!

Check us out at

Friday, June 26, 2009

The Government is Not Our Friend III

Here is another example of the government adding regulations during tough economic times and making business more difficult in California. Today our escrow company juist sent us a notice reading as foillows:

"Good Afternoon,

I hope all is well you. I wanted to make you aware of the latest to come down from the Department of Insurance in regards to customer service request (see our customer service department email below). The more clearly defined regulations are in effect immediately for our company but officially take effect July 1, 2009. Our passport system will be updated to be in compliance with the property characteristics within the next week. To obtain copies of documents you can contact the county recorders directly and there are several good search engines (ie Data Tree/Cyberhomes) that you can sign up with for a cost and information is available on-line for those services. "

This escrow company in the past could supply very important information about a property to help brokers evalutate the real estate, particularly commercial real estate where comps are not easy to find. But now the state forces them to only supply "Property Characteristics." "Those are as defined in Section 408.3 of the Revenue and Taxation Code, meaning:
· Year of construction of improvements to the property
· Square footage
· Number of bedrooms and bathrooms of all dwellings
· The property’s acreage
· Other attributes of or amenities to the property, such as swimming pools, views, zoning classifications or restrictions, use code designations
· Number of dwelling units of multiple family properties

Unfortunately, we can no longer provide Vesting Deeds, Comparables or a Plat Maps for customer service orders. "

Just one of many, many examploe of how larger government will justify its existence by passing more regulations and more laws. The monster is feeding itself. Sooner or later, food will run out and REALLY LASTING CHANGE will take over! Wake-up America!

Check us out at

Thursday, June 25, 2009

The Government is Not Our Friend II

Every once in a while I get on these rants on topics that are near and dear to my vs. government! This is not a partisan article, it is an anti-government article. So if you get offended by those type of article, don't read it!

To continue on my last topic "The Government is Not Our Friend" I want to get into more details of how a larger government means less liberties, more regulations, leading to a less productive business environment; which is EXACTLY what is happening in this country and particular in California.

One important axiom in the business brokerage business, and in any type of transactional business for that "time kills deals." What does this mean? Simple, the longer it takes to close a deal, the higher the chances of the deal failing. When the deal fails, everyone loses, EVERYONE!

So government's role is to help make the process smoother and increase the chance of a successful close, right? NOT! Even though the government is a direct benefactor of getting a deal closed - more fees, more taxes, etc. it makes us transactional brokers crazy with delays and rediculous regulations.

By definition, when government gets bigger, it must justify its existence. How does it do that? It passes more laws and regulations requiring more people to oversee and enforce those new laws and regulations.

Oh sure, you'll hear people say regulations are good, particulary after the financial melt-down in October 2008. Many like to point to the financial melt-down situation as a regulation issue in order to justify all the crazy stuff going on in Washington. Don't be fooled. It was simple greed from all angles (consumers as well as corporations) driving that crisis.

There are plenty of regulations in place to prevent that melt-down, but many were simply ignored for the larger cause "get more American's into homes." That was the driving force! Blinders were on from all sides of the aisle. Republicans turned their heads for corporate America CEO's with sickening bonus programs and Democrats turned their heads for the sake of getting American's into home ownership despite the fact they couldn't afford it.

Ronald Reagan once said "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." I believe we're entering Reagan's third stage for our society. When the government makes decisions for the individual - and that's exactly what regulation do - it is reducing our individual rights to manage our own lifes.

Sure there are some good regulations such as don't dump into our lakes and land...don't shoot down airplanes...don't distroy whole forests...etc. but there are many regulations burdening our personal freedoms to succeed.

We experience those burdonsome regulations in California with business transactions and business ownership. More and more companies have left this once great state because of the over regulation and over taxation. I believe in 1990 there were 120 or so fortune 500 companies headquartered in California. That's a lot of corporate folks with good salaries. Today I believe that number is about 20 or so. That's a lot of great jobs gone. Why? As I said, over regulation and over taxation.

We as a nation should be concerned with getting rid of regulations and laws that don't make sense any longer. It is rare that our legislators actually remove laws from the books. We have government entities overseeing other government entities overseeing other government entities and so on. Or policy makers need to get rid of the California Bulk sale law! Our state needs to get rid of the budersome ABC liquor license process. Our local governments need to get rid of the foolish over prices transfer of business health inspections. Our DRE needs to make it easier to get a real estate license during tough times and harder during good times - can you believe these guys at DRE!

If our industry of business brokerage has all these regulation causing delays and lost income, I can only imagine other industries where simple changes can make a whole lot of differences to making deals happen. But as long as the bureaucrats - mindless officials - have an open check book to tax us to death in order to keep thier jobs and power base, they will do it instead of looking to make business in California easy to do. We should all be pounding our government to make our lives easier, and growing it isn't the answer!

Check us out at

Wednesday, June 24, 2009

The Government is Not Our Friend

This weekend I read an article in the Sacramento Business Journal in the Opinion section titled A Government Belittled, Justice Denied written by Ralph Carmona a former University of California Regent and a former university professor. Just given those two positions, I'm sure one can figure out where his political views are coming from.

Ralph argues that our society needs to maintain our local law enforcement agencies and prison systems and not succumb to the pressures of lower tax revenues. That our community needs to pony-up more money to support these critical functions of our society.

Not a surpising response from a life long government employee who has never signed the "front of the check" and has always signed the "back of the check." Practicvally every singe person in this country, and the world for that fact, is cutting their spending. Coming up with creative ways to reduce their spending given their incomes have changes or their expectations of their income doesn't look good.

So why is it these government bureaucrats - bureaucrats is defined as an official who works on fixed routines without exercising intelligent judgement - just can't be like the rest of us and make tough decision on how to manage better with less?

Instead we see these bureaucrats making our job tougher each day by challenging our licensing requirements or increasing or changing regulations or by increasing taxes.

During tough economic times these are EXACTLY the opposite things government should be doing. Government should be making it easier to sell businesses and do business. Instead these these officials who are exercising routines without intelligences are making life for the very people who pay their damn bills more difficult.

Government should be making it easier to get business purchase loans. Government should be reducing regulations making selling businesses easier. Government should be helping the broker by letting him do his/her job and not harassing him/her because they are looking for any and all sources of additional income.

Here are examples of the absue of these mindless government people: Larry Braden has experienced some very clear harassment from the Washington State department of real estate and the worker compensation board. In California, the ABC no longer allows individuals to select any ABC office to begin the transfer process regardless of how backed-up the office you need is. It could take 2-3 weeks just to get an appointment these days. Health departments have increased their fees for transfers - in Sacramento they now charge $1,200 for a transfer. In California we have a bulk sale law that was established nearly 100 years ago during at time when there was ramped fraud occuring with people skipping town and not paying their vendors. The law is so out-of-date that California is one of five states that still has this law in place. This law causes at least another 30 day delay in trying to close a business purchase. Add this to the ABC delay of 45 days, and one begins to ask why am I here in this state?

Yesterday I had a clients who is purchasing a liqour license from us. He owns a bar in the redevelopment area of Stockton, and area where the city is screaming for more businesses to come in. He has a beer and wine license right now and is converting to a hard liquor license. He initally got the greenlight from the city to convert the license. Then out of seemingly nowhere, one of those mindless officials put on the breaks and said, "oh, you now need a change of use permit which will cost you $5,000 and take at least another 60 days." Can you believe it! Absolutely mindless!

In times like these the government is our enemy, yet we Americans have elected a government that is tripling in size, stripping away our liberties and making our ability to do business even more difficult. What the hell are we thinking folks!

Check us out at