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Cindy's Illiquid Assets?
The news that Cindy McCain defaulted for four years on the property taxes from one of her 7 houses, along with the $500K in Amex Platinum debt, leads me to believe that Cindy McCain may be having liquidity problems. Her largest asset, Hensley Beer Distribution, is a private company, so its stock is totally illiquid even though a big wealth management firm like American Express would loan her money (thus the huge Amex credit line) using the private Hensley stock as collarteral. But if every one of the 7 houses she owns is mortgaged, she might be having some cash flow problems paying for all those private jet rides for John. Obviously they paid up as soon as Newsweek broke the story, but how many other creditors are waiting to get paid?
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You don't expect the McBush's-I mean McCain's-to pay taxes like the little people, do you? Come on, they're special!
June 29, 2008 2:11 AM | Reply | Permalink
If it was Teresa Heinz instead of Cindy McCain the Republican noise machine would be attacking her as a deadbeat.
Oh what fun Hannity and Limbaugh could have had with that.
June 29, 2008 7:37 AM | Reply | Permalink
Now it all makes sense.
June 29, 2008 8:54 AM | Reply | Permalink
I had thought the McCains fell in the class that benefited from the bail-outs guaranteed by the "Large Corporation, Important Wealthy Individual Assistance Act" which unsurprisingly was passed with a large number of Democrats as well as all Republicans in Congress. (This bill has to be distinguished from efforts to extend unemployment, assist returning veterans,...) This assistance act was deemed by its supporters to be essential to keep the economy running smoothly.
June 29, 2008 8:56 AM | Reply | Permalink
Does she stand to benefit if the pending sale goes through?
June 29, 2008 9:23 AM | Reply | Permalink
Let's not couch this in obfuscating business terms. Yes, they're high net worth, but they're individuals. They need to take personal responsibility. You know, the prescription the bootstrap-folks always mete out to the Lucky Duckies in the lower tax brackets who don't deserve unlimited 0.0% credit lines.
As I said in another post, this embarassment also means they have $hitty accountants and even $hittier attys watching & protecting their megabucks. Missing $4000-6000 in CA taxes is a stupidity problem, not a liquidity problem.
And ultimately, if Cindy's having trouble paying for something, someone should remind her of the great, highly conservative Bill Bennett’s advice:
June 29, 2008 10:43 AM | Reply | Permalink
I'm not an economist, so my ignorance may be showing here: if an asset is totally illiquid, doesn't it have zero worth? If her stock is in a privately owned corporation, she can still sell it, unless the ownership is limited to "approved" persons. There is no market in that stock, but if she offered it for sale, buyers would bid on it.
She is not a "poor little rich girl". She is benefitting from Proposition 13, and owes a tiny fraction of the property taxes a new buyer would owe, but that was one of the prime objectives of that proposition. (The major objective was to virtually eliminate business property taxes, since that property is almost always leased.)
I'm sure the talk shows today will spend much of their hot air discussing the many problems the McCains are to our country. And, I'm sure the Phoenix Mars station will soon introduce us to a little green man living on Mars.
June 29, 2008 11:59 AM | Reply | Permalink
Thank you for that bit of information. I was wondering how she owed so little tax on a La Jolla condo.
June 29, 2008 3:40 PM | Reply | Permalink
It is highly doubtful that the McCains pay their bills, manage their accounts, juggle their funds etc. themselves. They probably pay a 'prestigious' accounting firm - through the nose - to do the 'juggling.' Chances are that not paying the property taxes was, in the end, financially profitable.
Nevermind that if we all withheld our property taxes not a few municipalities, counties and states would be in deep kaka. It's certainly not uncommon for the super-rich to expect the rest of us to carry them. Noblesse Oblige has always been a fiction.
June 29, 2008 1:36 PM | Reply | Permalink
Check out the new John McCain parody “Hot Headed” on MyParodyPage at:
http://myparodypage.blogspot.com
or on YouTube at:
http://www.youtube.com/watch?v=O_Dhxu-6l98
June 29, 2008 2:48 PM | Reply | Permalink
This stuff is embarrassing. Anyone who seriously thought that he would be the Republican candidate for President would have cleaned all these things up a long time ago. It's clear that he doesn't think he's going to be viable or win. He may not even be the candidate after the Republican convention, being so out of touch and polling so badly.
June 29, 2008 4:14 PM | Reply | Permalink
But not a whiff of it from the MSM. Instead, we have to ask whether or not Hillary's going to be on the ticket!!! (Haven't these people figured out that no one will answer this damned question?
June 29, 2008 6:54 PM | Reply | Permalink
Whether Cindy can sell her stock or not, beer is most definitely a liquid asset.
June 29, 2008 7:39 PM | Reply | Permalink
Purple State: Good one!!
June 29, 2008 8:01 PM | Reply | Permalink
Yes, all economists, non-economists, Obama supporters, Clinton supporters, and some Republicans agree about that.
June 29, 2008 10:11 PM | Reply | Permalink
What interests me most about this post is not Cindy's tax issues, nor the property tax rate in Cali, nor the liquidity of her beer stock.
What fascinates me is that a Professor at the Annenberg School of Journalism picks this topic as something to write about.
Since the topic has nothing whatever to do with Journalism, that cannot be the reason he writes about it.
It just destroys whatever faith I has left in non-scientific academics that with all the really important issues floating around in the political space, a Professor would choose this topic to write what is essentially a demogogic.
Is there nothing of more import that catches your attention, Herr Professor?
[Note: Of course, she should have paid the taxes on time; Prop. 13 essentially set the tax rate at 1-1.25% of the PURCHASE price of property.]
June 29, 2008 9:56 PM | Reply | Permalink
FreddyB: You lost me on this criticism. This is exactly the kind of thing public figures should be scrutinized for. The better question is, why hasn't this been covered on ANY other so-called news outlet. If the average-joe can be denied a job at a mid-size corporation for having a "low credit score", then everything that the McCain's do financially is 100% relevant.
June 30, 2008 1:54 AM | Reply | Permalink