Hollywood Area BIDs Get all Jeansy-Creamsy Over Multiplying Starbuckses, Garcetti Grins All the Way to the Bank

Eric Garcetti, thinking about his Starbucks stock and smiling upon the machinations of the city's BIDs
Eric Garcetti, thinking about his Starbucks stock and smiling down upon the machinational shenanigans of the city’s BIDs
There’s no question that the BIDs love them some Starbucks. Even the Sunset-Vine “Baby BID” loves its Starbucks. Heck, even the Hollywood Media District, the most thuggish of the Hollywood area BIDs, was caught loving up Starbucks in its macho, cowboy-faced manner on August 6, 2014.

But why do they love Starbucks so much? What is in it for them? It can’t be the coffee. Not even the BID folks are that depraved.

Never fear! We are going, inspired by the creative example of our Hollywood area business improvement districts, to explain it all to you!

In California, many politicians are required to file public financial disclosure forms, known in the vernacular as form 700s.1 For example, here and here are Eric Garcetti’s form 700s from 2012 and 2013.

Notice that our beloved mayor is not merely the water-waster in chief, he also owns a lot of stock in Starbucks. This is public information. For the sake of the argument, we’ll assume that at the end of 2013 he had $100,000 in shares.2 This was about 1900 shares at the end of 2012. Again for the sake of argument, let’s assume that Garcetti owned these shares at the end of 2008.3 At that time 1900 shares of SBUX were worth $17,632.

Correlation between price of SBUX equities and notional number of Starbucks locations in Hollywood
Correlation between price of SBUX equities and notional number of Starbucks locations in Hollywood. Click to embiggen.
So over 5 years, Garcetti’s notional SBUX holdings increased in value by $82,368, a five-year rate of 468% which, annualized, is 36.11%. Now, if your stock holdings grow at an annualized rate of 36.11% you will become very rich very fast. How then would you feel about someone who could make this happen for you? How would you feel about approving their building projects, subsidizing their creepy private police forces, their invasive attacks on the homeless, pretty much whatever they wanted? Probably pretty good, eh?

Now, you’ve seen from the chart above, the entire right vertical axis of which is invented, that the value of a share of Starbucks stock is more or less precisely correlated with the number of Starbucks locations in Hollywood. In fact, we’d go so far as to say that if you want to make the per-share price of Starbucks go up, you can do no better than open more stores in Hollywood.4 And if a confounding lack of imagination has led legislators to prohibit you from outright bribery of the mayor, why not encourage Starbucks to open more stores in Hollywood? It’s clean, legal, and effective, ain’t it?

Anyway, next time you’re in Starbucks just visualize Garcetti up in City Hall smiling his loony smile as the money rolls in. Ask yourself if you really want that seasonal-off-menu-overpriced-tweely-named concoction now? But if you don’t buy it you won’t be able to get in the customers-only restroom to puke your guts out when visions of the mayor “doing it” with the BIDs dance through your head. Now what will you choose?

  1. We insincerely apologize for the fact that, as far as we know, this explanation only works in California. This is because, for the most part, everything only works in California. But we believe in pixie dust the genius of crowds, and have no doubt that clever people in other places (we actually believe more in pixie dust than in the existence of clever people in other places) will modify this explanation to suit local conditions.
  2. The form 700s aren’t sufficiently granular to allow us to determine the exact amount, so we’re just randomly picking the highest possible value supported by the evidence.
  3. We have no reason to think this is true. We have to, in the time-honored manner of scientists everywhere, make stuff up in order to allow our analysis to proceed and then reveal our fantastical assumptions only in the footnotes, which most people don’t read.
  4. Don’t go all correlation/causation on us; we’re on a roll here.

Picture of Garcetti in the public domain because we believe everything we read on Wikipedia, don’t you? The chart is, sadly, not subject to copyright because it’s not a sufficiently transformative use of publicly available data.


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