
Can Facebook Save California? - miraj
http://paul.kedrosky.com/archives/2010/12/can_facebook_sa.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InfectiousGreed+%28Paul+Kedrosky%27s+Infectious+Greed%29
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schwit
California can't be saved as long as they have pension obligations that far
outstrip any potential new sources of income.
[http://articles.latimes.com/2010/apr/06/opinion/la-oe-
crane6...](http://articles.latimes.com/2010/apr/06/opinion/la-oe-
crane6-2010apr06)

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borism
did you too not notice the _/opinion/_ part in the url you provide? please do
not submit someone's opinion as a fact.

could you provide a link to the original studies mentioned in the article?

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ronnier
Building data centers in Oregon[1] and North Carolina[2] sure won't help. Why
would a California based company build their first data center in Oregon?

[1]<http://www.facebook.com/blog.php?post=262655797130>

[2][http://www.charlotteobserver.com/2010/11/12/1831199/facebook...](http://www.charlotteobserver.com/2010/11/12/1831199/facebookfacilitycomingto-
nc.html)

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borism
tax break, what else?

 _After officially announcing plans to build a data center in Prineville on
Thursday, Facebook officials told The Bulletin that the tax incentive offered
to the company through an enterprise zone was a key reason it came to Central
Oregon. By locating its new data center in the zone, Facebook will be excused
from paying as much as $2.8 million a year in local taxes._

[http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20100...](http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20100122/NEWS0107/1220410/1001/NEWS01&nav_category=NEWS01)

Seriously, 50bn SecondMarket cap company looking to save $2.8 million in
taxes?

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yummyfajitas
_Seriously, 50bn SecondMarket cap company looking to save $2.8 million in
taxes?_

$2 million here, $3 million there, sooner or later it adds up to real money. A
$50 billion company doesn't stay a $50 billion company by blowing $2.8 million
on nothing.

Sadly, that's a lesson the California gov never learned. If they had, they
might not be wasting similar amounts of money on pensions for criminals.

[http://www.newsoxy.com/world/disgraced-sheriff-
pension-13760...](http://www.newsoxy.com/world/disgraced-sheriff-
pension-13760.html)

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yequalsx
You can find examples of some public employees getting outrageous pensions but
these examples are at not typical. Given that California has a huge budget
shortfall are you suggesting that this shortfall is due mostly to outrageous
pensions?

We presently live in a system where states often times compete with each other
to offer incentives to attract factories or other operations that employ a lot
of people. These tax incentives are paid for by the people of the state, that
is, by the workers. It's a perverse system. Maybe companies should be willing
to pay their share of national defense, roads, etc.

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nowarninglabel
The shortfall itself is due mostly to decreased revenues as opposed to
increased expenditures. That said, pension expenditures are a fairly good size
chunk. There is a decent overview here <http://reason.org/news/show/fix-
california-pension-crisis> but if you want to drill down through the data
itself, it is available here:
<http://www.ebudget.ca.gov/Enacted/agencies.html>

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yequalsx
Yes, pensions are a major part of the shortfall but I specifically said
outrageous pensions payouts. It remains to be shown that the shortfall comes
from outrageous pensions. I've noticed that often times people mention the
unfunded pension liabilities in California and then point to a few extreme
examples. Are the extreme examples causing the problem?

There are structural problems with California governing system that give more
plausible reasons for its present problems. To go from Facebook setting up a
data center in order to save a few million dollars to an extreme pension abuse
example is very weak.

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protomyth
Don't forget the unfunded part of the current pensions, this has been a
problem building over multiple years and probably won't have and easy
solution.

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fredoliveira
the thing I found most interesting in this article was the fact that facebook
is now trading at a 67B valuation on the secondary market, making it almost
1/3rd of what google is today. Very impressive growth.

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borism
it was 50bn last week :)

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jdp23
but it's not a bubble ...

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thewordpainter
i might concur with that sentiment...but i think facebook is not the best
example. their upside is still tremendous, as they haven't fully exploited
their ad revenue (which is better positioned than google imo)

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jdp23
Facebook does have tremendous potential upside (as well as significant risks).
But it's really hard for me to see any reason their valuation would increased
by 30% in the last few weeks.

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sharednothing
The first surveillance state of the union, brought to you by the national
security apparatus - national infrastructure division. (facebook+cisco+your-
isp=full-stack-surveillance, little brother.)

