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Los Angeles Declares War on Colonel Sanders (and your portfolio)

Thursday, July 31, 2008 | Dylan Jovine

Rating:
LOS ANGELES CITY-COUNCIL MEMBER JAN PERRY THINKS YOU ARE STUPID.

Dense. Dumb. Obtuse. Dim-witted.

She also thinks I'm stupid. Indeed, I think it's fair to say that Ms. Perry thinks everyone in America is stupid.

The good news is that unless you live in the City of Angels, there's not much she can do directly to "smarten you up".

The bad news is that she just led the city council to pass a law with ripple effects that could have a serious financial impact on investors all across America - and around the globe.

How can a law passed by a podunk politician from La-La Land harm your portfolio?

Let me explain:

There's a 32-square-mile chunk of LA where the obesity rate is 30% among children, higher than the normal Los Angeles average of 20% or so. Now a high obesity rate among anybody - let alone children - is nothing to sneeze at.

But it's the City Council's solution to this problem that I found particularly disturbing -

In a 13-0 vote yesterday, the City Council voted to ban new fast food restaurants from opening!


That's right - for a period of one year (the original plan was for 6 years), no new fast food restaurants will be allowed to open in a 32-square-mile-chunk of LA (heretofore referred to "FAT L.A" - Jan Perry's district).

In other words, the best excuse the Los Angeles City Council could come up with for high obesity rates is to point its finger at the fast food industry.

--Instead of looking at parenting or education or home life, they thought it wiser to stop another McDonalds (SYM: MCD) from opening.

--Instead of lowering taxes for people so that they can afford to eat better foods, they thought it wiser to prevent any more Carl's Junior (SYM: CKE) or Burger King (SYM: BKC) restaurants from appearing.


--Instead of creating incentives for businesses to come to Los Angeles to create good paying jobs (instead of kicking them out) the best the Los Angeles City Council came up with was to tell Pizza Hut and Kentucky Fried Chicken owner Yum! Brands (SYM: YUM) to get the heck out of dodge.


Now, every adult in America who doesn't commute to work in a little yellow bus knows what they're getting when they walk into a fast food restaurant. Sure, McDonalds might have what they like to call a "healthy menu".

But everyone I know who walks into a McDonalds or a Burger King isn't really going there to eat a salad - they're eating there because once or twice each year they like to order a double bacon cheeseburger, large fries and a Coke (SYM: KO).

As for the children - well, what ever happened to parental responsibility? Isn't the job of the parent - not the government - to educate their own children as to what should and shouldn't be eaten on a daily basis?

Is the City Council of Los Angeles actually saying that residents of "FAT L.A." are not qualified to make that decision for their children? Clearly they are.

Is the City Council of Los Angeles actually saying that the government of "FAT L.A." is better qualified to make decisions for their citizens? Clearly they are.

But this kind of nanny-state activism raises some awfully disturbing questions - such as, Where does it stop?

Will the City of Angels send somebody over to your house to make sure that you finish your vegetables each night? What about brushing your teeth? Cleaning your ears? Cutting your fingernails? How fast should "poopie diapers" be cleaned? What about dirty dishes? And when should you throw away old shoes? I have no idea on that one.

And what about ice cream? Are Los Angeles City Council members going to dress up in paramilitary clothes and raid supermarkets that carry Ben and Jerry's Ice Cream?

Last but not least, has anyone even considered the psychological impact on children who are residents of FAT L.A.? Would Cheech and Chong have said they were born there instead of East L.A. if that was the case?

Where does this absurdity all stop? When do people start taking personal responsibility for their decisions? When do people start realizing that government is not part of the solution - it's part of the problem?

And worst of all - what if the laws being passed in "FAT L.A." get applied to other parts of the country? (I'd hate to see a FAT DELRAY where I live here in Florida - boy would I be in trouble).

If these silly laws did get applied to other parts of the country, what would that mean for the companies themselves? What about their stockholders?

(We all know if we let these health nuts from the west coast run wild on this one, fast food restaurants will be the next "Big Tobacco".)

While this may be bad news for the fast food industry in general, there is a silver lining.  Any existing fast food restaurant in FAT L.A. won't have to worry about any new competitors. Indeed, if you own a restaurant in FAT L.A., the value of your business probably just went up by at least 50% in real terms (sounds like a motive doesn't it).

But that's not the only silver lining the fast food industry has when facing the fierce Rob Reiner-led granola crowd of Los Angeles activists...

The good news for the fast food industry is that they have an actual fast food war veteran to lead their attack against the City Council of Los Angeles....

And not just any fast food war veteran, an actual colonel - Colonel Sanders! If anybody could beat up on these beatniks I'm sure it's him!

That's the good news. The bad news is last time I saw him he looked like he was getting up there in years.
*****

---To let Jan Perry know you are an adult who can make decisions for yourself and your children do so here: Jan.Perry@lacity.org.

(Please let us know what you think about Dylan Jovine's article.)
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Dylan Jovine
Chief Investment Officer
The Tycoon Report


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26 Comments

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  1. lisa (1 year ago) Is this Spam?

    when someone decides to open a fast food chain selling avocado, whole grain toasted bread, with tomatos and sprouts, or whole wheat pasta with chunky tomato sauce and olive oil drizzled over it to go.. or stir fried broccoli and garlic over brown rice with a dash of paremesan and honey on top and a few other fast food healthy offerings this country will shape up. get off the meat, pork, fatty fries, food soaked in melted cheese and the high fructose corn syrup and soy products that are making men feminine and soft and keeping women fat and maybe this country will have a chance..right now American are looking fat and ugly and we are an embarrassment. Soy and high fructose corn syrup are big culprets
  2. lisa (1 year ago) Is this Spam?

    LA is often ahead of the pack on health issues. this is great America doesnt need one more fast food chain ever unless its a health food chain..we applaud the good common sense of the citizens of LA who are fighting back against the tide of disgusting fast food chains that are making Americans fat and unhealthy. How you can say this not a positive move is incredible you are probably an investor of shares in these horrid fast food establishments and you are personally upset that you may see your profits dip..
  3. Walter (1 year ago) Is this Spam?

    To the "Legislators" of L.A.: Having an education and/or brains obviously disqualifies you from serving as law maker.

    To the citizens of L.A.: Make changes before it is too late!
  4. claudia a (1 year ago) Is this Spam?

    IT LOOKS as if Jan Perry just came back from a course in Brown's Britain which has become the biggest Nanny state going. And already over there council members can spy on the people in their community, watch how many veggies the children eat, citizens are told what to do from morning to night by the Govt' who purports to know better. And free speech? Against Labour? No way! You may be chucked into jail, and yes, it happened to an old pensioner who disagreed at a Labour conference.

    Is this really what this country wants? The land of freedom and opportunity?

    I Do agree that there is an obesity problem but parents Must take responsibility, and if the govt. wishes to intervene it is to have food companies follow strict outlines ref: use of sugars and starches etc. Also, restaurants should start cutting portions and prices making good food more available. It is sickening to see so much food wasted in the USA when people leave half the food on the plate which is then thrown out. Half the food-half the price should be the new slogan.

    But, in the end it IS the parent or parents who must control their child. And start cooking helathy meals at home!!! Is that so impossible?

    Our parents did I am sure and many worked a well so it can be done.
  5. Ken (1 year ago) Is this Spam?

    Dylan-



    While you comments are valid from a stockholder's standpoint...the real issue is economic, as in the impact of fast food on health care costs.



    This is not a "health nut" issue. Many studies have linked the American diet to diabetes, heart disease, cancer and other illnesses. This is not something that can be debated; it is fact. Research has told us such food eventually, literally, can kill people.



    Japan now requires employers to measure their employees waist size, because they fear that the disaster that is health care in this nation will repeat itself in Japan as that country copies the horrifically poor American diet.



    It is not rational to expect individual responsibility, from most people, regarding eating habits. While your suggested ways of changing eating habits - parental responsibility, etc. - are sensible, they will never be effective, because such bad food - which is what "fast food" has been proven to be - tastes very good. Tell people it can make them fat; sick; perhaps ultimately kill them, and they will still eat it. As they consume such food, people become fat. When they become fat, their health declines. As their health declines, health costs surge.



    And health care costs is reason enough to enact laws to combat the ever rising tide of fast food restaurants.



    If fast food fuels fast increases in health care costs for all of us, then those undisciplined people who cause the increase in costs must be reined - in. Thus allowing the government to contol our bad habits to some degree may be a fair, if obviously unfortunate, option.



    Ken Rawley

    Former hospital chief marketing officer
  6. Ethan R (1 year ago) Is this Spam?

    Bravo, Dylan! More and more we become a society of big brother choosing what they think is good for us. You know some people go to fast foods because they can't afford anything else. Some just like the coffee.



    When parents demand that Johnny and Susie play outside instead of sitting in front of the Nintendo game or the TV or the computer all afternoon, maybe the obesity problem will decline. When schools stop cutting gym programs and letting every third kid with a hang nail get out of gym class, maybe then we won't have 33% of our teenagers (recent stat) being obese.



    Thanks for a great article. As you told me once, I really have to step up my game now for tomorrow.
  7. John (1 year ago) Is this Spam?

    It seems governments have gone nuts in passing laws attempting to solve any perceived problem. Seattle recently passed a law that grocery stores must charge 20c for plastic AND paper bags, and banning styrofoam containers altogether. They are now turning their attention to people who move scooters to make room to park their cars. I'm not making this up.

    Here is the absurd extrapolation. Every action by every person has some element of illegality. Conspiracy theorists, complete this paragraph.
  8. Nigel (1 year ago) Is this Spam?

    Dylan, you're way out of line on this one. Firstly, I don't know what you have in for Jan Perry specifically, but the article reported that there was a 13-0 vote at the Council. Clearly she's not the only one who thinks that way - twelve other councillors agree with her, and none with you. So at least the "blame" needs to be shared.



    Secondly, the city is responsible for zoning. Most North American cities mad dreadful blunders over zoning when they encouraged the sub-division mentality, and the mall, which has destroyed the main street as a source of commerce. To feed this setup, a private car is a necessity to get around, and nobody walks anywhere, because there's nowhere to walk to, and few sidewalks. Walk to school - er, no, because the community school isn't where our kids go, and they have to be driven or bussed. There's no healthy part of modern life in California, which is why the obseity numbers are where they are. So if the city wants to use some of its waning stock of authority and power to strike a blow against high-fat, high-salt and high-cholesterol foods, I say - good for them. You do indeed have a choice, but then, so does the city.
  9. Dr. A (1 year ago) Is this Spam?

    You have overlooked the Real problem of this Law.



    Are we still living in a FREE country that is based on Law not emotions and that has a Constitution. Or have we become a nation that is ruled by the whim of the majority?



    Aubie Baltin
  10. RAD (1 year ago) Is this Spam?

    Thanks for the clarification as to the definition of an "unemployed tribute slave". Ahhh.



    And yes, John M, I caught Jefferson's tongue-in-cheek remark. But apparently you missed my ironic humor in saying he got it wrong. (I thought the smiley face was sufficient. I admit my assumptive error.)

    :)

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