Clearing The Air

Worldwide economic meltdown and Nicoderm: Name two things which seemingly have nothing in common

Pundits and Monday morning quarterbacks around the globe opine that it was subprime mortgages and loose qualification standards that caused the mortgage foreclosure crisis and subsequently the world financial crisis. But according to Wikipedia the first subprime was initiated in 1993, so subprime loans were nothing new in 2007. From 1993 to 2006 borrowers for the most part paid their subprime loans and kept their homes.

So what was the catalyst that caused homeowners en masse to default on their subprime mortgages and eventually lose their homes to foreclosure? It doesn't take much research to realize that a job loss is the major reason behind a borrower's inability to make payment obligations on automobiles, homes, etc.

According to Wikipedia beginning in late 2006, the U.S. subprime mortgage industry entered what many observers have begun to refer to as a meltdown. A steep rise in the rate of subprime mortgage defaults and foreclosures has caused more than 100 subprime mortgage lenders to fail or file for bankruptcy

In 2006 the economy was relatively strong, unemployment was low, yet by the end of 2006 foreclosures were becoming an epidemic. Where were the job losses occurring? How did they go unreported? Why did these massive job losses go unreported?

There was something quietly happening in the background which went largely unnoticed. In city council chambers, county commission offices and state capitols one by one a political movement quickly, yet silently swept throughout the land. It was a movement many mused as largely insignificant if not outright politically correct, a movement "whose time had come". In fact the only time this sweeping political agenda* made news was when newspapers, television media, universities, and "charitable" organizations were editorializing in favor of enactment of these anti-choice initiatives. So when these nationwide and worldwide government mandates started having a negative financial impact on the businesses they were meant to legislate behavior in, the media was not about to report the failings & disasterous effects of the same legislation they earlier advocated.

As it happened, predictably to some, the enactment of the aforementioned behavioral control legislation (smoking bans) decreased revenues in most, once profitable, hospitality businesses. The eventual closure of these businesses led to significant job losses and ultimately the avalanche of foreclosures which thrust the world economy into its current crisis.  

3,382 UK pubs closed after nationwide smoking ban  

South Dakota's smoking ban, just one month old, has already cost the state, charities, and local hospitality businesses millions of dollars in lost revenue  

1,000-2,000 US bars & restaurants closed after various smoking bans were enacted
 
Nearly 300 Mpls / St. Paul bars & restaurants closed after smoking bans were enacted  

Casino revenue losses in Colorado & Las Vegas after smoking bans
The links above provide further information to backup the business closings mentioned, but for every establishment reported closed there are no doubt many others unreported. And for every establishment reported closed there are 20 - 30 jobs eliminated. In Minneapolis / St. Paul area alone nearly 10,000+ jobs were eliminated due to smoking bans (not including indirect jobs affected such as vendors, suppliers etc.), multiply that 10,000+ by the number of major metropolitan areas which enacted bans between 2002 - 2006 and you can understand the reason for the steep rise in the rate of subprime mortgage defaults and foreclosures in late 2006. As a matter of record, this author's home was foreclosed upon in 2005 and was eventually forced out in late 2006, due to job loss from smoking ban, just as Wikipedia data suggests.

Gordon Gecko reminds us that even hospitality workers bought houses before the foreclosure crisis

But he forgets to mention what later happened when those workers lost their jobs due to revenue drops after smoking bans were enacted.....massive numbers of home foreclosures, consumer spending drops, the ripple effect multiplies....etc....etc.

Meanwhile, the special interests who funded and lobbied lawmakers into enacting the economy ravaging legislation have some very dubious financial ties to, you guessed it.........Nicdoderm, Nicoderm CQ, Nicotrol, Nicorette, Commit, etc.

So the next time some pundit tells you the economic meltdown was caused simply from subprime loans, asked them why the meltdown didn't occur in 1993 when the first subprime loans came into being. Then asked them what caused the job losses between 2002 - 2006 which prevented subprime mortgage holders from paying their mortgage? If they're being honest, they can point to only one industry sector which was under seige by special interests and liberal nanny-state lawmakers......the hospitality industry........and the weapon of mass job destruction?.......Smoking Bans.


http://www.forbes.com/2009/06/04/economic-impact-bars-restaurants-opinions-contributors-smoking-ban.html
So, even if legislators are reluctant to listen to arguments about individual freedom or those based on preserving the welfare of tobacco manufacturers, there are other, very real economic trade-offs they should consider when voting on a smoking ban.
Dr. Jonathan T. Tomlin is an economist and principal at LECG, an international economic research and consulting firm.

http://www.scribd.com/doc/8426223/Pakko

Those (hospitality businesses) that serve food and alcohol, or alcohol only, show (statistically) significant losses with estimates in the range of 6.5 - 11%....

Additional reading: RWJF (Nicoderm maker Johnson & Johnson's partner) has provided over 2,400 grants totalling more than $446 million to promote behavioral control legislation that has decimated the worldwide economy.

Here's a spoiler alert for you.....liberal lawmakers, called DFL here in MN, voted approximately 85-95% in favor of unnecessary, government imposed, smoking bans....Republicans voted approximately 85-95% in favor of PRIVATE hospitality owners making their own business decisions....see vote link above.

Additional reading:(Ventilation equipment is allowed in the industrial workplace to remove welding smoke, why not in the hospitality workplace to remove tobacco smoke? The fact that Nicoderm, Nicorette, Nicotrol, money via RWJF is used to finance smoking ban lobbyists is the likely reason......it's all about making money not concern for health)

http://cleanairquality.blogspot.com/2010/03/smoking-ban-lessons-learned-typical.html

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posted by marcus aurelius @ 7:39 AM