mind the gap

I have no idea why I’ve read the Washington Examiner. Well, I do. I saw the headline about commuting costs and grabbed a copy to see if it addressed my ongoing advice/rant to people about the costs of living, proximities, and the ‘walking dead’-like life beyond the beltway. At the same time, I wanted some numbers that might enlighten my fellow Metro riders when the endless debates –revived every time there’s a WMATA budget announcement – about fare hikes explode. As a preface: I think WMATA is probably one of the most poorly run organizations you can find. The safety issues, infrastructure failures, and big step increases in fares, for less service, are problematic. But, you could live in Birmingham, Alabama or Nashville, Tennessee and be paying more to commute on average than you do here.

According to the story, the average monthly cost for commuting in the DC area is about $12,644 per year. I’m assuming that for a household and not a single person. If you’re young, single and living near a Metro station, even one beyond District bounds, you’re paying about $1,700 a year to commute in and out of the city at rush hour, per working adult. Are the delays? Does L’Enfant sometimes smell of fish? Are tourists a problem? Yes to all. Then again, you don’t have to deal with traffic, the system can function far better than cars in bad weather, and you’re paying about a quarter the cost of the average car living knucklehead. Ask those Leesburg commuters about that 16 hour hell-commute from two winters ago. You’re saving $9,000 per year just on commuting - $750 per month that can go to rent or a mortgage payment. This was all quite obvious even before the article, but people didn’t want to hear it. I had fellow students (young ones) who commuted 25-40 miles per day to go to class – aside from their work schedule – because the horrid suburban garden apartment they are sharing with a little known, trashy roommate was $150 cheaper per month. That ‘benefit’ disappeared when you drove your first 200 miles each month – or three days of class. Add in parking and the time you’ve wasted and this deal went south the moment you signed your lease.

I wondered what our commuter financial hit came to so I did some maths. According to AAA’s driving costs, which include things like insurance, maintenance, gas, etc., it costs us about $.78 per mile to drive Galactica. X runs 19 miles per day (20 days per month) for $300. L rides the WMATA bus to school for $60 per month. My walk/bus/Metro/bus/walk commute is $200 per month. The boys walk their bags of bones to the school bus everyday for nothing. Even taking into account L’s ‘commute’, we only come to about $560 per month / $6,700 per year. I can’t imagine how commuting sucks away the cash for those paying twice what we pay. There are no doubt there are those who are yanking that average up and area paying upwards of $18,000 per year just for commuting. And, quite truthfully, since my company gives me $200 for commuting each month (straight cash, no taxes), and L.’s commute shouldn’t really count, we are at something like $3,600 per year.

I’m glad we staying in our area when we bought. I think we make lots of money, but another $9,000 needed for commuting would be pretty difficult to pull off.

don't put that in your mouth!

I listened to Kojo oversee the airwaves today while his guests had a pitched battle about dollar bill vs. the dollar coin. If you’re wondering about my inclinations, I’m a dollar-coin guy and a rid-us-of-the-penny dude. There doesn’t appear, nor has there ever, to be any valid reason for disagreement. Not necessarily as an issue with me, but with commoncents (see how I did that? Sneaky). The point of this babbling isn’t to get into a deep discussion on currency and the Bureau of Engraving; the point is about polling and results.

One of the lobbyists for the dollar-coin industry (it exists) pointed out that survey results will always have a built-in percent, he claims 20%, who are opposed to anything you might ask. (As an aside, the lobbyist works for the numismatic folk. Not a word you get blogged at you on a daily basis.) Of course, I immediately started pondering all the polling numbers that no doubt include that 20% of disagreers. I’m probably one them for many questions. The kicker is that they know from the Canadian dollar-coin debate: those that ‘opposed’ the change wouldn’t even consider going back to a bill. They returned to those polled about two years after the change, and they were much than happier with new coins. Maybe there was a new 20% within that group who opposed the questioning…or something else floating out about the universe. I’ve decided that I’m immediately eliminating 20 points from all those polls that disagree with my position. Fair enough.

(P.S. I think I should remind everyone that the coin issue of “weight in my pocket” has zero effect on me – my man bag remedies that issue. I don’t carry anything in my pockets.)

i can't see! where is it? where am i?

The art of politics and the doing of the doing.

It’s taken some time rehashing and doctoring this up to get there to a point at which I’m happy enough with it. You may want to bail out right now; if you don't, you'll be here for a bit.

I guess the three main things I’m driving at are voter inattention (polling data now vs. later), the amount of time and money needed to get things done, and the endless methodology of not actually doing anything because you’re in a bad mood.

First of all, the mid-term elections are still 8-9 months away and what’s become clear to me about American politics, and the fickle voter, is that nothing beyond two months stays in our head. Screaming about the healthcare overhaul? Gone. The “you lie” moment? Gone. Tea Partiers? Nearly gone. Granted, some issues are bigger than others but we don’t care to remember any once the latest Palin, Cheney, or Holder misstep or battle pops up. By the time we hit the September – November 2010timeframe I suspect things will have changed for the better; and by better I mean the economy. Not only am I comfortable that it will happen but I need some time and space to clear up a few issues, issues that fall in tandem, that bother me.

First, the stimulus package that got everyone so riled up last year. I think I brought it up a bit back then but it’s worth a look back at the money and bill. You can take a look at the stimulus tracking Web site or the WaPo breakdown if you want exact numbers (or go to any site you trust). A key provision of the bill was that the distribution of the benefits was scheduled for the out years; 2010-2014 being on the table. The point of that delayed gratification was to allow us to put on the brakes and steady the landing before moving money into others areas over time in order to prevent a back slide. So far, only about $200B of the nearly $800B has been distributed. I’d venture to guess that 95% of Americans think the entire $800B is gone and lost by now. When Japan was battling this same type of collapse in the 1990s they made the mistake of funding recovery and then backing off – it tumbled even deeper at that point – and then re-funding. And stopping. And re-funding. It ended up worse in the end because there was no long-term commitment by the government and the people. The delayed investment plan will work throughout this year and by the autumn things will be more stable and the public will see the benefits; and long forgotten this idea of turning over any portion of governing to those who refuse to govern. What about the unemployment rate? That’ll take awhile longer, as should be expected. Unemployment is a lagging indicator on the way down and it’s still a lagging indicator, on the way up, during any recovery. Considering that it was discussed endlessly during the collapse as a lagging indicator, I’m surprised how mental everyone is that it’s coming back so slowly: we knew that would happen. It’ll be two years before we see the unemployment numbers drop back down to 6% or 7% - call it the nature of the beast.

Second thing: the recovery/stimulus package and cutting taxes vs. spending. You can dig around for yourself but know that 22% of the entire package (per the CBO; the % is in the 30s by other accounts) was strictly tax cuts. There is additional spending, as was/is needed, but when one party wants tax cuts and another wants increased spending to fix a problem you can’t get everything you want in a bill; the pie only cuts in so many ways. The party in charge is going to get more of what they want and that’s the compromise part; not to mention the election and democracy part. Nobody who’s against the current process would even think to point out that tax cuts were part of the stimulus because it would merely expose them for the lost souls they are. The Republicans simply voted against it because they refuse to actually do anything, at all. (No Republican member of the House voted for it, three senators did: Specter, PA; Snowe and Collins, ME)

This brings us to the ‘jobs bill’ that was passed in the Senate last week and which really triggered this entry that’s killing you to read. It still needs to be reconciled with the House version but the real kicker is that the Republicans and Harry Reid watered it down to almost nothing in order to get some support and it ended up being a $15B bill that will provide, per the CBO, about 250,000 jobs. Is it perfect? Not by a long shot but for those 250,000 folks it’s important. The kicker? Nearly the entire bill ($13B) is tax cuts. Employers who hire unemployed workers are exempt from payroll taxes until the end of the year and will also receive a $1,000 bonus if the employee is still there after one year. Let’s break this down: tax cuts to employers in order to allow them to hire more people, folks getting off the unemployment rolls and off the socialist agenda, and more money into the economy via their new dollars to spend. Sound familiar? Sound like Republican talking points? Certainly. And how many voted for it? Five of 41 (Brown, MA; Snowe and Collins, ME; Voinovich, OH; Bond, MO). What does it mean? It means that we are continuing to see the Republicans selling a bill of goods that is directly opposed to what they say out of the other side of their mouths and it’s killing our government. If those five moderates didn’t actually vote for what they stand for (lower taxes, getting folks back to work, etc.) then we’d still have absolutely zero from the Capitol and it’s mostly propped on the laps of the Republicans. No one can actually take people like Boehner or McConnell seriously. They yell and scream about tax cuts but when you give them tax cuts they stick their heads and sand and do nothing. Are they going to get every thing they want? Not a chance. As Sen. Lindsey Graham said during the Sotomayor hearings: we had an election and the results matters.

I also don’t want to wander to far away from my massive disappointment in the leadership of Congress. I find both Reid and Pelosi to be lacking in shepherding legislation through the two chambers: if I could choose, I’d look elsewhere. Even with a massive majority they’ve been unable – Reid, in particular – to rally forces and votes to move business through the Senate. The run-up to the summer recess is going to be the stretch run for the fall elections and those months need to be used to lay the groundwork and continur the progress we’ve made so far. If you don’t think anything’s been done then you don’t actually follow events.

Lastly, on the budget and the deficit. I’m sure we all know that the funding for the war on terrorism wasn’t actually funded via normal budgetary methods from 2001-2008 (it wasn't reported as deficit spending but it sure is now). Funny that. After the budgets for defense were approved every year, the Administration used emergency funding to come up with nearly $500B for GWOT between 2001-2007. “By 2007, roughly 25 percent of all of the resources coming into Defense were coming through the emergency funding "window."” (Another $142B was emergency funded in FY2008.) By my tally that’s about $650B over eight years that wasn’t included in any annual budget. (The Heritage Foundation says it’s closer to $800B from 2002-2008 – you should read the whole piece if you have time). By contrast, the recently signed $626B defense budget for 2010 includes monies for both basic defense spending and the wars in Iraq and Afghanistan (whose costs have not been budgeted for the last nine years.) In the end, we’ll pay for the $650B in emergency funding – it’s a part of the debt; something that’s rarely followed – but it was never reflected as deficit spending while it was happening; convenient, that is.

As Coates said just today at his site, “In all of us, there are strong motives for not thinking. Just getting through the day as tax-paying, spouse-loving, child-rearing adult is hard enough.” True that. True that.

I think my readership will probably drop to zero after this...

bags of money

I was ready to off and run on using cash versus card fees this morning when I stumbled upon this in the NYTimes. Usually, I feel like they steal ideas from me but I didn’t get on the ball fast enough to claim any sort of misdemeanor on their part. This all blends into a local-area thing I’ve been on over the last months: cash money. When you read the piece you’re clued in on what goes on beyond just the fees and percentages and stumble into things like interchange costs. I’d read about the process awhile back and when you realize that the “percent” paid isn’t actually the “percent” paid then you get frustrated. It seems like we’re talking about nickels and dimes but it isn’t; they estimate it costs the average family $427 per year and brings in $45 billion to the issuers and banks - not just nickels and dimes anymore. My initial change from card to cash was based on local businesses more than chain stores and national retailers. If I can save myself and my computer repair shop, auto mechanic, co-op, local bookstore, local CD shop, or small restaurant a few bucks here and there, I’ll do it. I’m not naïve enough to believe that there isn’t a need for plastic – whether debit or credit – but we can limit what it costs us and our merchants. Clearly there’s a need when shopping online for big ticket items like plane tickets and hotels but I know I’ve been able to limit my use of my even my debit card when buying around here. It certainly takes some planning on my part: stopping at the bank and withdrawing cash to pay bills (I even avoid the ATMs as much as possible) in advance can be a bit of a hassle, but not anything I’m not willing to do.

In the words of William M. Sheedy, VISA’s president for the America (nice title, BTW), “At times we have a perspective problem.” I don’t think it’s perspective, Mr. Man.

Speaking of hassles. D.C. implemented a $.05 charge on plastic bags starting on January 1, 2010 and apparently the apocalypse is upon us. Once again, a pretty simple life lesson (even beyond the enviro-screaming): if you’ve never been one to use reusable bags then I will guarantee if you give them a go you’ll never go back. If you need to load up three bags of chow and haul them to the car, the hemp or reusable bags with actual handles are so much better. You keep them in your car, you carry them into the store, just like you do with your wallet, your keys, your head, and your feet, and you shop. This is not some cultural overhaul; think of it as a functional change to your life. If, after you’ve done that, you want to further consider the benefits of not having a bunch of plastic bags flying around the planet, feel free. If you want to keep using plastic bags, feel free, I’ll merely add you name to the column under ‘simpleton’.

I have a Capitals game tonight so I’ll be in my seat and drinking a beer.

...makes the world go 'round

Sometimes the learning bit is the hardest part. Well, that and asking the questions you know will confuse the worker bees. As reported yesterday, I had an appointment this morning to have a couple of fillings replaced after my dentist told me during my last cleaning that they were getting a bit tired and should probably be redone; it’s probably been 15-20 years since I’ve had a filling. “Sounds like a top-drawer idea,” I said to him and I made the appointment to come back after vacation and get all gussied up, dentally speaking. A few things popped into my head last night that gave me pause as I headed to bed last night: the first was the dental guard situation (see my previous work here and here), and the second was X’s incident with the boys’ fillings. A quick review of the fillings is pretty simple – the boys ended up getting a number of fillings amongst them and the bill came to an uncovered number around $1,000. The problem is two fold and has been created by both the insurance companies (Delta Dental for the boys and the Tricare Retiree Plan for me, both of which are similar) and the dentists. Fillings can be dicey since the insurance basically covers amalgam fillings but not the resin composite option that most dentists seem to prefer. In X’s situation there wasn’t any pre-work talk from the dentist about the type of filling and/or whether or not it was covered. I don’t necessarily expect the office to know the ins-and-outs of every plan but if there are filling types that often enough aren’t covered then they should point that out, pre-drill. I decided to ask the office manager about cost and coverage when I signed in this morning; I might as well have walked in with a pig on a leash based upon the confusion I caused. My position was this: I’m cool with amalgam since I’m not a supermodel and I don’t really want to come out of my appointment, walk to the counter to pay my share, and hear the number $500. I have 80% coverage on amalgam (my 20% would run about $80-$100) so I wanted her to give me confirmation of the type of filling and the billable amount to me. Twenty minutes passed before she said they don’t do amalgam but there is some talk in my coverage (which I’d already read) that allowed for an adjustable rate for the composite resin. In either case, she couldn’t actually tell me how much two fillings would cost me before getting the work done. I’ve also found out that filling replacements, in general, aren’t covered in any circumstance unless it involves the structure of the tooth. The end result was that I wasn’t interested in a procedure with no cost associated, especially something as simple as a filling or two. What she finally put forth was a novel idea that they send a pre-authorization request to my insurance who will then respond to both of us with covered costs which allows both of us to understand my payment before the work is done. Her final attempt at “mysterious procedures and billing” involved letting me know that it can take up to three weeks for a pre-auth to come back from the company. I told her that was fine with me since I figured the difference between the $100 I think I should pay and the $500 sticker shock was worth the wait. I have my own ideas of how an office manager should run the place but apparently it’s too hard for anyone else to understand….sort of like turning from your lane to you lane when you’re driving.

I’ll keep you updated.

payola

This piece was passed to me by a co-worker after a lengthy market discussion we had last week. I think everyone should read it for the background, details, and ideas concerning how the markets were affected and some of what contributed to where we are right now. It's well written and does without the yelling, screaming, and preaching you often come across these days.

whack jobs

I was listening to some commentary this morning about the various state governors either refusing stimulus money in whole, or wanting to move the money from one program to another. I’m of the opinion that governors probably have a better idea of where their state might need funds but, unfortunately, it becomes a problem when stimulus money is just passed out to folk and they are allowed to do as they please (see: AIG). If a federal stimulus plan is based on the ideals of the administration and congress in charge then it’s going to lead to some gnashing of teeth on programs. Clearly, the Obama plan is to build infrastructure, education, support unemployment benefit pools, and hopefully reassess and support the mortgage market. If, as a governor, you don’t agree with that, so be it – make a rational argument. But if you’re Mark Sanford (S.C.) apparently your input is that the stimulus package will lead to “debt” and “higher taxes” As Seth and Amy might say, really? If you want to push back, not take money, request to move money, or fight for your people….do so, just don’t look like an idiot. How exactly does he think it is going to work? I’ll give Gov. Sanford a story problem: you need $100,000 to get yourself through a year of your life but you only earn $70,000 a year and you can’t sell your house because the market’s for junk. What are you going to do Mr. Man? You either need to bring in more money or you’ll need to borrow. Or, if you’re Mark Sanford, you complain that living with less than you need can’t possibly be remedied if those are the choices. Sanford is nothing but static gumming up the airwaves. The state of South Carolina requires more money than they are bringing in and they’ve got a few choices: cut services, raise taxes, or increase debt. Take your pick as opposed to saying that your choices are cutting services, raising taxes, or increasing debt; that’s actually the question, not the answer. If your state’s unemployment benefit pool is almost empty and you are offered help then you should probably take it. Yes, I understand that the money won’t magically be created down the road; it’ll have to come from higher taxes and it adds to the debt – do you think you’re telling us something we don’t know? And if I may, finally, I’ll add that Sanford is a Republican – a hack Republican, but a Republican, nonetheless – and his party has spent hundreds of billions of dollars that the government didn’t actually have – we also call that debt in the liberal movement. In order to pay back this debt….they cut taxes. What? Let’s see: I ran up my credit card with more than I can afford and I think the best solution might be for me to quit my job and cut my revenues; excellent plan. That’s that, I guess.

On a lighter note; sports fans are nuts. I’m a huge fan of a number of teams – most don’t win many championships – but I don’t think that I ever get completely thrown off my rocker. Some of the Capitals fans who “contribute” to the blog at the WaPo are seriously crazed people. (The Caps have had a very uneven start to the month.) I actually think there are old coots out there who think they should win every, single game – it’s mind-numbing. Maybe I just shouldn’t read the blog; there’s a solution.

My cat, even though already demanding more than is necessary, has decided to actually speak to me when she wants her pets. She used to just climb up on my lap but suddenly she’s taken to making noise prior to arrival and attacking my hand with the top of her pretty little head. I didn’t ask for any of this…

diatribe

I've finally caught up on some news and shows. I'll be brief. Jon Stewart has never been a great interviewer but his comedic commentary is impeccable. The war of words between he and Jim Cramer completely exploded this week and Cramer agreed to appear on Thursday night. I'd recommend watching the entire week's worth of shows, but if you aren't up for it then at least watch the three-part unedited interview that you can find at www.thedailyshow.com. Cramer gets credit for sitting down for this undressing, trying to admit his jackassery, and taking it like a man. You can write this off as comedy, as a liberal comedian being a tool, or as something you don't want to hear, but the truth is...

Fuck you, Jim Cramer.

kick in the teeth

Do you know what I love? Meetings. Meetings that are allegedly scheduled for a given time that start late and then devolve into an unmoderated, heaping pile of junk. It happens all the time: 90% of the meetings held in the business casual environment are completely unnecessary. And, if you’re going to ‘hold’ a ‘meeting’ you need to have an ‘agenda’ published ahead of time. “Hey guys, let’s get together and blindly say words and communicate via incomplete sentences concerning fragmented thoughts while staring at poorly constructed PowerPoint slides. It’ll be great!” Today I’ll be hostage to a telephone conference / meeting. Nice.

I’m back from my week out West and have settled into some cooking, a comfortable bed, and the cool weather of the greater Metro area.

The Eleven is off to the Opera tonight to see Carmen. The mezzo-soprano, Denyce Graves, is apparently the “greatest Carmen of our time” but we won’t see her – the understudy is doing two shows and one of them is tonight. We have horrible luck with these opera gals – Angela Gheorgiou (La Boheme) ditched us on closing night at the Met in NYC last Spring, and now this. We’ll be riding the Metro and then the Kennedy Center shuttle after learning last outing that parking is $17. At those kinds of prices they could charge $700 for occlusal guards.

Speaking of occlusal guards, my dentist came up with a cost of $719 for a pair. I went in yesterday for the taking of molds – imagining that plastic teeth guards that prevent grinding – and thinking it would run me something like $200. As they are in the middle of doing my uppers the office manager comes in to “let me know” how much it’ll cost and whether or not I want to have the guards fabricated. Apparently, the cost to them is about 15 minutes of time because they send the molds off to be made for $570. There’s also a mysterious $150 lab fee that isn’t covered at all by my insurance. She tells me the lab fee is for some type of special molding-canoodling that makes the guards more comfortable to wear at night. What? They are made for nighttime wear…shouldn’t that be standard. “Anyway, we can give you these night guards but they’re made of wood splinters. If you want them to actually be comfortable we’ll be needing some extra money.” I called back this morning and cancelled the whole thing. I’ll put a bullet between my teeth at night and call it good. Of course, I fell for the same old dentist junk: always ask and agree on cost before Dr. Doolittle gets you in the chair. Unfortunately, most that I’ve come across in the last two years are some shady financial characters.

I’m thinking of putting in for some government bailout money. Has anyone found the application forms online?

T

can you spare $5?

This whole economic mess involving mortgages, from the point of view of the homeowners, the banks that bought the chicken parts or the original financing companies, became much clearer while I was sitting on the couch last night catching up on the NY Times. I read the paper, I watch debates, I follow what’s what online, I’m pretty well informed – but very few articles have been able to condense any of the issues into such a well-defined set of paragraphs. As the bailout package sits on the back porch doing jack-all we have yet to hear anyone inside the Beltway explain what happened within the markets; what brought about the problems we have and/or why it spun out of control. I’ll worry about the solution on another day. Here’s the NY Times staff editorial that made me call out “what the hell is up with tranching and CMOs?” I didn’t actually think or say that but I did some layman’s research on how this crap works and it doesn’t take a rocket scientist – or economic wonk – to see how fiendishly the system was manipulated. Let’s simplify. I’ve got some money that I want to lend. Not only am I gagging to dole it out but I’ve found some folk over in the District who will are willing to buy these loans after I’ve done the legwork – and it’s for enough money that I’ll turn a profit and be done with worrying about deadbeat loan takers while they get to lap up even more money. I gather up my some of my pals – a few are good with money, a few are bad – and I hook them up with some loans: money here, money there. Let’s say I end up loaning money to ten friend, five of which are the type that either never pay back my money, never buy a round at the bar, or simply don’t have the means to ever pay me back. In fact, in my normal day-to-day relationship with them I’d never expect the money to come back, I’d think it a gift. I give them each $1,000 at interest that would return me something like $1,216 from each of them over four years (that’s 4% compounded over 48 months). This little package of gold would be worth, if every one pays me back, about $12,150 in the end. Of course, I know that the chances of my five loser friends paying me back are nil so the profit isn’t really going to be that $2,150. Fortunately, I have a plan. Remember those big money investors in the district? I’m going to sell all $10,000 worth of loans to them for $11,000 and they get to keep that extra $1,250 that will (no doubt!) come flooding in when the loans are paid back. I take my $1,000 for doing the work and head to Verizon Center for a Caps game and a few beers. The next day, I find ten more folks to play my game…ten more the next day….ten more the next day. I’m working five days a week handing out $1,000 loans to any one who can sign their name and I’m making $20,000 month with no risk because I don’t care about collecting these loans – I just sell them on to my sugar daddies in the District who are making (at least on the books or in their minds) about 25% more than I. Free fucking money all around! Yes! Of course, my five loser friends from my Monday transactions aren’t going to pay back the money they owe…ever. The first five good friends pay back their money – about $6,000 – and the other chuckleheads each manage about $500 ($2,500 total) before moving to California and starting medical marijuana farms. My pals in D.C. now have $8,500 on the table to cover the $11,000 they paid me for this “bundle” of loans. I’m going to guess that a 23% loss on that 11K investment isn’t going to go over too well in the boardroom. If they were losing that much on my Monday transaction just wait until my Wednesday crew’s payments dry up. How about six months from now when I’m just signing up folks standing on the platform at Ballston station. Shoot, six months into this escapade I’ve made about $120,000 by just selling all this bad paper to the folks in the golden city who think they’ll make $250,000 on my work. The problem is that I’ll be keeping my money because I won’t be standing near the inferno when the match is lit and the loans go up in a blaze of glory. The loans they paid $120K for will be worth something less than $100K and their little operation goes under.

There’s some math in there but there isn’t much economic instruction required. Is it a very simple example of how the mortgage crisis went to crap? Yes. Is that what was happening? Yup. No one ever imagined that the house of cards would collapse – it’s the Black Swan syndrome. When we look at it now it seems comical that the “smartest guys in the room” would continue to operate while jumping up and down for joy on what was clearly a shallow mooring. But you know what? What I really hate, and what the Times editorial made salient, it this: the ones giving out the loans knew those loans would probably never be paid back. They didn’t care because once they sold them along to another “investor” they were clear of the problem. They were deliberately deceiving both sides in an unregulated market; not only screwing the home buyers, who aren’t totally innocent in this debacle, they were screwing the investors (also not innocents). Picture someone walking into a bar and sucker punching two dudes in the face and then walking away while they mistakenly fight each other. What a fucking bastard.

And so ends Todd’s economic firestorm.

Have a nice day.

spare change?

I remember taking both macro and micro economics during my foray at the University of Iowa: I hated them both, but for different reasons. All you need to know about my micro economics class was that it was in the basement of a very old university building at 7:30am two days a week.

"When we add an additional trillion dollars to the debt, the burden of the taxpayer, sooner or later there's got to be a reckoning," said Sen. Richard Shelby (R-Ala), ranking member on the Senate Banking Committee.

I’m onboard with Sen. Selby – and I think I’ve seen him during various hearings and no doubt laughed at his generally horrible behavior. I’m only letting him participate in this entry because he has said it best. Not only that, remember last month when Freddie and Fannie were in “trouble” and the government passed a bill that only authorized a government takeover “if” it was needed for the two mortgage giants? Everyone pretended that authorizing the use of force was not the same as actually saying you could use force. Wait, wrong fuck up. What they said was it was only an authorization to move further into Freddie and Fannie if needed. No worries they said, it won’t be needed. I could be forgiven for thinking that we were reckoning this out six weeks ago but there’s no way that authorization wasn’t going to be used. Shoot, if they send me a credit card with a $20,000 limit there’s no way I’d actually use it, right?

What we’ve got now is another reckoning. In the most basic economic terms I can sort out, it comes down to a proposed ~$700 billion Treasury buyout of mortgage and mortgage-related failing investments. The breadth of the buyout is limited to Wall St. banks and corporations and not specifically to individual buyers and mortgage holders – call them ‘the people’. Sec. of the Treasury Paulson wants a quick and clean move to get this rolling line of credit up and running. Some in the Congress, on both sides of the aisle, appear to be pushing back against a straight, uninhibited, no oversight, limited control, three-quarter of a trillion dollar check. For differing reasons (the fighting Republicans dismiss it as a bailout; the fighting Democrats want more oversight and more help for ‘the people’) I think it’s probably a solid idea to hold off and take the time to bang more heads together until there’s a much more solid piece of work. I see how desperate everyone on the Hill seems to be but why is it that suddenly, beginning on a Friday afternoon and carrying through Sunday meetings, did everyone decide that we were in a 60-hour time warp where we’d just discovered the problem? Wasn’t it clear over two years ago that the housing and mortgage sector was collapsing? Haven’t I listened to endless talking heads discussing whether or not we were in a recession yet because the official term ‘recession’ can’t be used until two consecutive quarters of a crappy economy have happened? What worries me most about Paulson in particular is what the hell has he been doing since he was appointed? It looks like he’s been sitting in his office playing minesweeper and watering the plants. Imagine someone who actually was taking steps as the problems arose and attempting to sort out solutions in a serial manner. Instead we get everyone running around over a weekend with their hair on fire as if this was all a surprise.

You know what? I don’t have the solution. I know that’s pretty obvious. But…I’m not paid to have the solution. If you want me to kick some ass on PowerPoint, I’m your man. I’m all for the reckoning that’s coming and I know it’s going to hurt…a lot. This is an opportunity while we’re standing in dire straits for someone to come out and say the words I long to hear, “This son of a bitch is going to hurt for a good long time. You might need to lock down that seatbelt and get ready for a rough, rough ride.” And I want them to mean it. I want them to quite blowing smoke up my skirt. We aren’t children.

And the next time a pile of politicians come out for a press junket and stand line abreast like they’re a stern and supportive looking YMCA basketball team, I’m going to kick them all in their shins. Nothing says “we’re so confused and useless” then a flight of unblinking, alleged leaders.

Ah. Monday.

t

pony up

Here’s a bit of a review on the day’s affairs.

I cleaned most of the house, as I’m wont to do.

I planned menus for the week.

I cooked.

X bought a Mercedes-Benz.

Do not question the machine.

I came home from the market with my nine cups of arugula for tomorrow morning’s breakfast (don’t ask). I also needed some parmesan aged 24 months (she loves that), some Greek yoghurt, a bit of bread, and a few lemons. The lovely had departed for chiropractor at about 10am and returned about 2:30pm with a well-straightened back and a golden car – as if that’s normal. Actually, my story of heading to Reno for a queen mattress and coming home with my Prius probably ranks in the same category. I never in my life imagined I’d drive a Merc…never. It’s a six-year old car with low mileage, plenty of safety, and piles of extra junk. She honestly stumbled on a gem; that doesn’t mean I won’t give her endless doses of big law firm, Northern Virginia suburbs, and private school harassment. My only stance is this: I will not drive into a Whole Foods parking lot in an E-class Mercedes. No fucking way. Not ever.

I know it’s a lame stance…but it’s a stance nonetheless. I'm going hip-hop and all...

t.

one....million....dollars! it's all i need

I was perusing CNN.com this morning and decided to sort out my retirement needs by using their handy-dandy retirement calculator. I know that at my age I should be doing more than playing with a retirement calculator on a populist/news Website… maybe saving more money. I typed in a few figures (birth, death, dates, income, percentages, etc.) and hit calculate. I knew something was amiss in my life when the damned thing told me I’d need $18 million dollars by age 60 in order to meet my retirement fantasy. That seemed a little extravagant based on my current lifestyle. But hey, if that’s the number, so be it. Who can argue with math sums? I immediately began to think of ways to cut back on spending: cancel my $14.99 monthly Netflix account, stop giving $10 a month to Minnesota Public Radio, shop more at Wal-mart (see below) and less at Whole Foods, and maybe get another two or three high-paying careers. Why would anyone need $18 million for retirement? I began to think that all this ‘financial planning’ was nothing more than a scam perpetrated on generations of people who merely want movies delivered to our mailboxes, no late fees, and good music. Are we to live like paupers? This is why we’re in the state we’re in…too much worrying about the economy, politics, Democrats v. Republicans, red states/blue states, Iraq, Jessica Simpson and Britney Spears; it’s all going to hell. I decided right then and there to make a change and set out on a new beginning, a new day if you will, and take the righteous path to my $18 million pot of gold. I began jotting down the numbers from the ‘calculator’ onto a clean sheet of a yellow legal pad so I could begin to really crunch my life’s numbers. Oops. It appears that I mistakenly input that I wanted to live at 80% of a $880,000 annual income instead of 80% of a $88,000 income – funny thing about zeroes. Shoot, if I could live (or even earn) at 80% of $880,000 I’d be sitting at home on the couch watching all ten seasons of the Sopranos. The moral of the story? Check you’re math.

There’s a report that Wal-Mart is going to lower prices 10-30% in order to ‘stim-U-late’ the economy. I think the most important tidbits from the press release are these:

Wal-Mart announced Tuesday that it will chop prices between 10 to 30 percent this week on groceries, electronics and other home-related products in an effort to keep its cash-strapped consumers excited about shopping.

And,

Wal-Mart said for $10 or less, its shoppers can bag 4 Pepsi 12-pack cases and 2 DiGiorno 12-inch pizzas.

Let’s parse that first bit. Wal-Mart is making an effort to “keep its cash-strapped consumers excited about shopping.”? Isn’t that the germ of the problem? That’s like a corner drug dealer saying he’s going to throw in an extra 8-ball with every purchase just to keep his addicted consumers ‘excited about addiction’. Okay, maybe I’m being a little harsh, maybe I should read the entire article – oh, look here, you can get (for a sawbuck or less…) 48 cans of Pepsi and two frozen pizzas! This is what they’ve come up with as the selling point – the coup d’grace – for their grand plan: two crappy 12” frozen pizzas and a keg of Pepsi? How about for a tenner or less we can get a dozen eggs, a gallon of milk, two loaves of bread, a bunch of bananas, and a half-dozen tomatoes? How about that?

T.

hey kids, don't do drugs

The idea that I would be checking grammar on any document (a driver’s license, an exit sign, a birthday car from my mother, or children’s homework) must be some sort of irony (X can explain the four types of irony; she’s like that). I vividly remember sitting in English classes taught by the likes of Ms. Wiltsie, Mr. Howe, Mrs. Chevalier, Mrs. Lorenzen, and Mr. Drickey, and ruing the day I was born and eventually mandated to fulfill public school English requirements. Those hours were, and I am not understating, the most tedious and horrific classroom times of my entire life. I hated them…every last second. I hated English like I hated Barry Switzer and the Oklahoma Sooners during the 70s and 80s. Hate. Is that clear enough? It wasn’t the teachers, it was the material, and it’s probably one of the reasons I never much liked fiction or novels - it seemed like too much work. Back to the story. X gave me a legally paper of some sort last night to proofread. Giving me anything like that is opening up the writer to ridicule and general laughter from my position on the couch. The reason I’m so difficult on papers these days is that I remember running away screaming from any type of writing, but I also reflect on the last ten years and know that I’m much better at some of the word stuff than I was throughout the 1980s and 1990s. By any account I’m self-taught, a very middle-of-the-road self-taught, and I find myself amazed that college graduates (and law school students) write formal dissertations at about my writing level. I’m always assuming that I’ll be duly impressed by their wordsmithing, yet I rarely am. (By the way, I had two New Yorkers, one Esquire, and the Onion laid before me, ready to enjoy some reading when the 30 pages covering “prior informed consent” were tossed at me.) I played along and made feeble attempts to only highlight subject-verb agreement errors, grievous misspellings, lack (or inclusion) of hyphenated adjectives, etc. I think these are the evenings spent together that represent the pillars of loving relationship. Actually, that’s not true. I think she’s been misguided by our daily discussions on slip decisions, politics, and ‘what’s for dinner’. It happens.

Not only that, but as I was scratching a few red marks, and making sure that I didn’t make her look stupid when she hands in the draft, we end up delving into some of her tax law studies. For instance, if you purchased a lottery ticket and gave it to your progeny as a gift, and those numbers hit three days later, what is the adjusted basis of said “gift” and when would you claim the income tax purposes?. I know what you’re thinking – who cares? I care, that’s who. I immediately piped up with a ‘scenario’ where I had sat down at a Caesar’s Palace blackjack table (non-smoking) and parlayed $100 into $1200 over the course of an hour. If this had ‘actually’ happened, the pit boss would have stopped over to not only complement my excellent play, but he would have wanted me to join the player’s club. You know…name, room number, address, driver’s license…just fill out this form, well played! You see, if I’m sitting at his table with 1G of earnings he’s going to report me to the IRS. The problem for him is that he’s got no idea whether or not I’ll cash in and walk away when I’m done; all he knows is that I just made $1,000 – so it’s time to pay up. The value of my black chips doesn’t change unless I’m stupid (see below), just like the value of the ticket doesn’t change regardless of when I cash in because it isn’t traded like a stock or bond. You pay taxes the moment it’s worth the winning amount and you claim it during the tax year it was awarded, not the year you cash it in. I’ll be open for tax consultation, and comedic interpretations of the tax code, through the extended deadline in October. Two shows on Sunday.

If you must know, my friend took his money and walked down to the MGM in a vainglorious attempt to get back the $300 he lost the previous night. That is never a good idea. I think everyone should use the story of my friend as a definitive lesson in gambling.

Peace and aces.

T.

fine leaders

The House Resolution (H.R. 1591) and paired Senate Resolution 965 (S. 965) that are crashing down the halls of the capitol represent a excellent look into just how much hasn’t changed when considering the incompetency of our elected officials. The titles of the two resolutions, respectively, are: Making emergency supplemental appropriations for the fiscal year ending September 30, 2007, and for other purposes and; An original bill making emergency supplemental appropriations for the fiscal year ending September 30, 2007, and for other purposes. Such straight-forward titles for what should be a straight-forward bits of legislation. Both bills are allegedly supplemental spending allocations for Iraq (military and reconstruction funds) that were requested by the President. The total that came from the White House was just under $100 billion dollars – remember, this is supplemental spending, not part of any budget (gotta keep the money on the down low…). The house, led by Speaker Nancy Pelosi, added $40 billion dollars in spending to the resolution along with a deadline for U.S. troop withdrawal from Iraq; two sides of the same dirty political coin. The deadline will obviously force the President to veto the bill and the money (on the other, dirtier side) is simply to bribe Dems and ‘Pubs to at least initially support the bill…deadline and all. What may happen down the road when the President finds his “VETO” stamp (psst...it’s in the bottom drawer under the Christmas party pictures with Rove playing Santa) is a whole seperate issue. I don’t know if either the House or Senate has the votes to override a veto but we’ll certainly be in for some crappy political theatre. Here are a few things that will no doubt be said by the politicos across the river:

“The President vetoed the bill for more spending to support our troops in Iraq…hater!”

“The House, and the Democrat majority, submarined spending and support for our troops in Iraq by appending a deadline to withdrawal…traitors!”

Of course, support for the troops and the money needed to get that done is not the real issue; it’s the spending and bribing that gets done under the auspices of being patriotic. The spending amendments are merely buying off anyone needed to support the bill: for $50 million dollars to your state you’ll apparently vote for anything. If you look at the Senate resolution and the amendments that are proposed you’ll see the following sponsors:

Sen. Robert Byrd (D-WV)
Sen. Mary Landrieu (D-LA)
Sen. Harry Reid (D-NV) x 2
Sen. Kay Hutchison (R-TX)
Sen. Jeff Sessions (R-AL)
Sen. Thad Cochran (R-MS)

You can read at CNN or MSNBC or Fox to get details of some of these amendments: insect research? Katrina relief? Tree saving? Milk? All a bunch of garbage that doesn’t belong in the bill. At least Sen. Cochran showed some onions – I can read the text of his amendment at the Library of Congress website prior to the vote: he wants to strike the deadline from the bill. Good for him. The other amendments are tagged as “Purpose will be available when the amendment is proposed for consideration. See Congressional Record for text.” Of course it will be…but I’ll have to dig through mountains of text to see just how much you’ve spent and just how much I despise your actions. And just so we can fully enjoy these ideals set forth by our representatives in Washington, bear in mind that each of these spending amendments ($283,000,000 for Milk Income Loss, $74,000,000 for Peanut Storage Costs, and Sen. Reid’s $20,000,000 for insect research, etc.) in the Senate resolution can be cited, under emergency designation, by using the bill’s title: U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. Nice.

I’ll bet that Hutchinson and Sessions will fall in line with Senate Democrats on the resolution vote…you think? The Dems will play it as Republicans breaking from the party in order to show solidarity with the Iraq withdrawal deadline. But what we really know is that Sens. Sessions and Hutchinson just want to get paid. Reid, Byrd, and Landrieu look worse on the day - they are simply taking money because they can.

No more politics.

T.

working and long weekends

Work has been revived. No much to report since the Berlin Wall came down a few months ago: I moved cubicles (not because of the Wall), work is still…how do I say this?…boring, and I’m stuck on Metro because the bike path is nothing but ice and packed snow. But – the long Presidents Day weekend has somehow recharged the generator (refilled the generator?) and I’m back to being a little more aggressive. Just what everyone needs – me and aggressive.

Here’s what whacked me in the head on Saturday – immigrants, workers, and that Statue of Liberty. Commuting via rail, but particularly by bus, makes me realize just how long the hours and rides are for those doing the hourly work and manual labor in this country. I see them everyday, but Saturday evening at 7pm stood out (as I was driving home from the store) as the throng of workers moved through our neighborhood on their way home – on a Saturday (not very suburban, is it?). It only took two blocks for my tiny brain to go from “why are they working so late on a Saturday?,” to “not much money in those jobs, and the commute is a bitch,” to “now I see it!” And here it is: the chance to work and earn a living (even if it’s seven days a week), to have good schools for your children, safe neighborhoods to live in, no worries of persecution through religion or politics, and a chance to be warm and safe each and every day must be a pretty f*&king amazing feeling. If it takes those kinds of hours then people do it. Call it happiness, call it freedom – it’s all anyone wants…and we’ve got it. And we wonder why people come here.

Stay tuned.

T