flitter
21d ago
It’s just looks like a constant gotcha with no desire to understand what is going on.
Yeah.
The real estate deal had nothing to do with Georgism.
If the leases have actual value as in the real estate went up in value and someone would rent it for a higher price you occasionally see the leases resold for profit to (Red Lobster in this case) a new business (in this case an expanding restaurant chain) but most of the time the landlord takes a big L and has a pain point of figuring out what to do with the property.
I see a similarity between them:
Georgism incentivizes maximizing profit over real-estate by increasing the rent. Low income usages can't pay the rents. Some implementations (??) make the land owner set the price they're taxed on and they'd be forced to sell to any purchaser at that price.
But here someone bet the land was under-utilized, bought the company with the goal of selling hte land to someone who can make more money with it. I'm not sure about the implementation of whether the previous owners of Red Lobster knew this was the plan and were okay with it.
Overstated it seems. Hyperion commented on this take, do you have a similar view to them?
I think people haven't fully grappled with the implications of Evolution. And maybe don't understand how capitalism works. I barely do either.
Here are some talking points I see:
Why shouldn't an owner be able to buy a failing restaurant, sell the real estate, and then let the restaurant fail?
There's the inconvenience of being reorganized. All the employees on the healthcare plan, who've moved across the country for this job for their family, who've put effort and sweat every day to make the company better (and other such sympathetic narratives), are suddenly shuffled into the labour market without their consent.
Particularly when the company is on net-profitable. A narrative that this perfectly fine business that's meeting people's needs is deemed "unvaluable" by corporate spreadsheets and then gutted to make room for some high-end fancy business. Rich people are willing to pay more than poor people, and now this veers into gentrification arguments.
if I buy something I should be able to do what I want with it
There's also aesthetic quality to this.
Buying a rare painting from a private collector and then burning it is legal and unimpeachable, and yet I still feel there is something lost, an aesthetic duty to the commons. Memories, sentimental memories lost to the wind. Perhaps less so with a property like Red Lobster.
flitter
22d ago
Ah, I have a very shallow model of Georgism.
Specifically I got it confused with the argument that it pushes low-value companies out of high-value land (as a pro).
The recent discussion about Red Lobster (link) focused on analyzing how the $20 all you can eat shrimp bankrupted the company because it was too good of a deal and analyzing the declining social trust to keep it afloat.
Everyone in the comments has fun linking this to their favorite hobbyhorses. Here's mine talking about a cool idea for a legal system I was thinking about.
Great story everyone. But one question, is this actually true?
Some Xsocial users are linking the company's demise to private equity:
Quote https://x.com/windcomecalling/status/1790889866844422528
while this is a very funny idea, the reality is much more depressing: they made like $2 billion in revenue that year. the loss from endless shrimp was basically a rounding error—the thing that actually bankrupted them was private equity
Hmm.
Quote https://x.com/edzitron/status/1790493687572754654
Their ceo is a lawyer-MBA and they were bought by a Thailand-based private equity group that makes most of its money selling canned seafood, and they've been downsizing the company consistently since Thai Union Group took control in 2020
They also launched an insane permanent all you can eat shrimp deal that killed revenue. Thai Union basically ran the company into the ground.
Seems like the private equity group is deliberately running the company into the ground, and using the unlimited deal as a cover story. Another case of corporate greed destroying a profitable company and generally being evil.
Great story. But one question, is this actually true?
This analysis is another interesting angle on it, quote https://x.com/cunha_tristan/status/1791807133886861317
Golden Gate bought Red Lobster for 2.1 billion, and then sold off a bunch of real estate for almost that much. Although at one point they actually bought back a little bit of it, which is weird.
But then after selling the real estate, they sold the restaurant business to new investors. They sold the initial 25% of it for over $500 million.
Which seems to show that the real estate and the restaurant businesses were more valuable split up than together. It seems like the restaurants owning their real estate was dragging down the value of the real estate, it was worth much more split off. Which would make sense if the restaurants were poorly run, that business was being subsidized by the real estate portfolio.
The land was more valuable than the company. Private equity bought the company to sell the land to someone who could make more money with it.
This is.... Georgism???
Great story. But one question, is this actually true?
I honestly don't know.
Here's a 2015 article showing Golden Gate Capital made the transaction the last tweet is talking about:
Golden Gate Capital, which bought Red Lobster from Darden Restaurants Inc. for $2.1 billion, and then sold that real estate to VEREIT for $1.5 billion, has now agreed to acquire $204 million of Red Lobster real estate back from the firm.
The narrative seems plausible and would be an interesting twist. But perhaps it's too good of a story.
Does anyone have more source/knowledge of this kind of corporate dealing? Is private equity delivering the Georgist promise?
flitter
22d ago
Hmm good point.
If this is a serious problem maybe the company would require legal identification and/or a bank account demonstrating sufficient funds before they engage with customers. Which would be inconvenient for everyone if the policy was applied equitably.
Or maybe Red Lobster could cooperate with one of those governments that have a facial recognition based social credit score to identify non-cooperative persons.
This takes the time of the manager, plus whatever employee who has to testify
It's okay to take time and expense to punish wrongdoing. The whole basis of revenge is that it's kinda non-rational after the crime is already committed. But the ability to pre-commit to revenge means that rational agents won't mess with you to find out.
The higher levels should get far less usage because the threat of higher-level punishment prevents rational agents from non-compliance. I concede that this doesn't seem to be how current legal systems are setup. Also I'm not a lawyer and I'm just spitballing fantasy systems on an internet forum.
flitter
23d ago
No, Red Lobster won't call the police immediately when they see 10 people eating 1 buffet option.
In a civilized society it's a series of escalations:
-
Fine print in the menu will say the buffet deal is only available for 1 person, and the restaurant reserves the right to cutoff any customer at anytime without a given reason.
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Now when Red Lobster sees 10 people eating from one buffet option, they have a contract justification to have an employee go over there and gently say, please don't do this.
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When that doesn't change behavior, Red Lobster has justification to charge the table for 10 buffet meals with the cheque at the end.
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When the table refuses to pay, then Red Lobster has justification to take the table to the small claims court.
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When the table refuses to pay in court, NOW finally the cops get involved over criminal behavior
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Now jail becomes an option because of breaking big laws
This process can break down at any point due to the enforcers lacking will or ability to straightforwardly enforce the law.
However when the system works, it can enforce numerous arbitrarily small contracts (Red Lobster buffet fine print) with the threat of overwhelming force.
Christ is a prophet in Islamic theology
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