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End of The Year Thoughts


By Frank Gruber

Two thousand eight was the year when despair passed the baton to hope. Only time after January 20 will tell if hope passes it to achievement, but it's an exciting moment we're living in: the economy hits the skids as it hasn't in 80 years, our foreign policy is as confused and conflicted as it hasn't been since whenever, but we elect to be our leader the candidate who four years ago was the most unlikely.

One thing -- I'm happy that Barack Obama is taking some time off in Hawaii because all the people declaring whether his presidency is a success before it's even started are starting to annoy me.

Don't they realize that Obama and his sidekicks, David Plouffe and David Axelrod, are ten steps ahead of them?

Remember in September when the financial crisis took its big turn for the worst? And everyone was saying that this would limit what Obama could do in the way of his ambitious plans if he became president? (There was even an extended series of questions about this during one of the debates.)

But then at some moment President-elect Obama turned the crisis into an inevitable blank check -- the return of Keynesian economics.

Locally, in Santa Monica, where no incumbents who ran for anything lost, I'm predicting that this will be the year that turns the old French adage on its head; instead of "the more things change, the more they remain the same," I suspect in future years we'll look back on this election and say, "the more things stayed the same, the more they changed."

That's because the election, particularly the defeat of the no-growth party behind Measure T, exposes rifts (sorry) in the coalition of old-style progressive realists, who recognize that we live in a capitalist society, and anti-growth idealists, who would prefer to ignore that fact, that has always comprised Santa Monicans for Renters Rights (SMRR).

Although SMRR leaders managed to impose enough discipline on the four council members who were elected with SMRR support to have them all vote to elect Ken Genser mayor and Pam O'Connor mayor-pro-tem for two year terms, expect to see Council Member Kevin McKeown finding common ground with Council Member Bobby Shriver over the next year and a half more often than he does with some of the other SMRR council members.

I predict that this will culminate in some kind of battle for the soul of SMRR, if not its endorsements, at the organization's convention in August 2010.

Meanwhile, expect to see more crossover politics, as the political issues in Santa Monica turn from classic Santa Monica issues like land use, traffic, and homelessness, toward fiscal issues, as the state budget crisis, the decline in the economy

(and sales tax revenues), and Calpers' bad investments in sprawl real estate (requiring more local contributions to the pension plan), cause considerable upset in the City's and the School District's budgets.

That could be where local and national politics intersect, as the Obama administration should realize that the quickest means to inject money into local economies to keep people working is to help state governments deal with their deficits before they cut services or raise taxes.

For instance, voters in school districts throughout Southern California have taxed themselves tens of billions of dollars to build schools in the past two decades; what they need now is not more money for construction, but operating funds to keep teachers and staff employed and children learning.

Hope for a return to "revenue sharing."

Another phrase to look for a return to is "money in the bank," as in where we all wish we had had our savings. Since I run a business, my law practice, I keep more money in a regular checking account than my wife and I would otherwise need to have so accessible, and I always have resented how little interest I get -- nickels and dimes a month.

When I was growing up there was a system -- banks paid four percent on deposits and collected six percent on mortgages -- and on that two percent they made a living. Could someone remind me what the problem was?

I also have a little money that accumulates in a brokerage account, earning hardly any interest, and since I know I'm the world's worst investor, it stays there because I avoid making any decisions about investing.

But now, what do you know, but the money I have in the bank and in the brokerage account turns out to have been my best investment. Unfortunately, those accounts aren't too big. Everything else my wife and I have -- from the value of stocks and California tax-free bonds to the value of our house -- is down from 20 to 50 percent.

But the money in the bank is just that -- money in the bank.

Oh well. We do live in one of the better places on earth. Actually I think this ongoing economic calamity with its attendant scandals was designed to make me feel thankful for what I've got.

After all, I'm not poor enough to worry about becoming homeless, and I'm not rich enough to have been bilked by Bernard Madoff.

And on that note of thankfulness, Merry Christmas and Happy Hanukkah.

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