Great Park
If Dick Sim is concerned about the management of the Great Park (May 16 Business Journal story), the rest of us should be scared to death.
Sim is an experienced, thoughtful, committed Irvine developer who has a unique insight to Southern California. His comments raise concern that Agran’s gang is in a position to do about whatever they want with the El Toro space without much input from all the rest of Orange County that falls outside of mighty Irvine.
His resignation, as well as the departure of four other key planners, should send up a red flag that we shouldn’t ignore. Public land is just that,public,and if Agran has total control of the planning process and is not restrained by open public debate and input we should expect a boondoggle of enormous proportion.
Sim makes several great suggestions, not the least of which are to plan well before we spend even more money, and to get decent representation from all of Orange County before it is too late.
Jon Wampler
Newport Beach
Pension Debt
I enjoyed John Moorlach’s May 9 Comment on the Orange County Pension Plan.
One point he omitted, however, is that the Fed’s practice of monetary inflation punishes those who pay their debts off early.
Using a five-year amortization on the new $300 million pension plan funding obligation might sound good on the surface, but there may be an opportunity cost to doing so.
The advantage of inflation and a 30-year amortization is that the dollars used to pay the majority of the principal off in the last 10 years will be worth significantly less than they are today. After 20 years, roughly $176 million of the borrowed principal will remain unpaid, but due to inflation, over the last 10 years of the amortization period that debt roughly will be equal to only $74 million in today’s dollars.
This is a very simplistic example but the point is monetary inflation rewards borrowers and punishes savers.
The real risk facing Orange County or any entity with significant debt is the threat of monetary deflation.
If the massive debts at the government and individual level overwhelm our financial system and the Fed is unable to keep injecting monetary expansion into the system, those in debt will be in big trouble. Their debts will have to be paid off in dollars whose purchasing power has increased over time!
Now you can appreciate the dilemma of individual savers and investors today. Will inflation or deflation win the battle? The strategies to employ are drastically different under each scenario.
Perhaps Orange County should borrow money now at the low interest rates available and purchase as much gold and silver as they can as protection against a very uncertain economic future.
Ken Reidy
Seattle
Newspaper Circ
Re your May 9 OC Insider item that referenced the flat circulation of the L.A. Daily News:
Yes, the Daily News’ story about declining newspaper circulation did focus on the precipitous drop at the rival Los Angeles Times. But in reporting its own relatively good results, the Daily News neglected to mention that early this year it did a direct-mail blitz offering one-year subscriptions at $24.
That’s right: twenty-four bucks for a full fifty-two weeks. It works out to an 88.5% discount from the cover price, or about 6.58 cents per issue. I think of it as 5 cents each for the Monday-through-Saturday papers and 20 cents for the Sunday edition.
Granted, this price cut came too late to affect last year’s tepid results. But it dramatically illustrates how seriously (if belatedly) at least one publisher is attempting to increase, or at least preserve, paid circulation.
I’m not cheap, but I am mighty thrifty. So naturally I subscribed, adding the Daily News to my reading menu, which also includes the Los Angeles Times, New York Times, Wall Street Journal, Los Angeles Business Journal and, of course, the OCBJ.
Art Detman Jr.
Pacific Palisades
