Monthly Archives: February 2009

Money as a Signal

I run another blog that is basically a conversation between a real good friend of mine.  We end up talking lot’s of politics.  And my latest entry kinda sums up on how I feel about money.

I thought it would be good to double post that entry here today.

The Cost of Money

The Chairman’s Weekly Radio Address: February 21, 2009

Barack Obama’s Weekly Radio Address

February 21, 2009

Earlier this week, I signed into law the American Recovery and Reinvestment Act — the most sweeping

Sweeping is a word.  Not the one I would have picked, but, hey, who am I?

economic recovery plan in history.  Because of this plan, 3.5 million Americans

How do you know?  Where did you get this number?  3.5 million…..

will now go to work

This is tricky of you Mr. Chairman!  Very very tricky.  You make it sound like these 3.5 million, of which 3.5 million are unemployed, will go to work.  Now.  Gotta hand it to ya sparky, sure got the Chicago style down pat, dont’cha?

doing the work that America needs done.

I’m grateful to Congress, governors and mayors across the country, and to all of you whose support made this critical step possible.

Lot less of them that ya thought, though, huh?  All this hope and change?  Yeah, me either.

Because of what we did together, there will now be shovels in the ground, cranes in the air, and workers rebuilding our crumbling roads and bridges, and repairing our faulty levees and dams.

Those things, those things should have been being done ANYWAY!!!

Because of what we did, companies — large and small — that produce renewable energy can now apply for loan guarantees and tax credits and find ways to grow, instead of laying people off; and families can lower their energy bills by weatherizing their homes.

Blink.  Blink.  Weatherize our homes?  Next you’ll be tellin’ me to inflate the tires on my car!  Hahahah–wait, what?  You already said that?  Oh my.

Because of what we did, our children can now graduate from 21st century schools and millions more can do what was unaffordable just last week — and get their college degree.

Whoa whoa whoa sparkey.  More money in the schools ain’t what keeping kids from graduation.  You got that!?

Because of what we did, lives will be saved and health care costs will be cut with new computerized medical records.

Awesome idea.  Really really is.  But not stimulative.  Just not.  Write it up in a bill and pass it.  But don’t lie to me.  Change my ass.

Because of what we did, there will now be police on the beat, firefighters on the job, and teachers preparing lesson plans who thought they would not be able to continue pursuing their critical missions.  And ensure that all of this is done with an unprecedented level of transparency

Cough  —bullshit— cough.  You didn’t even let Republican LAWMAKERS in the room when this was written.  You SAID daylight.  5 days.  For us to see.  Transparency.  “I don’t think that word means what you think it means!”

and accountability,

Right.  Forgive the disbelief.

I have assigned a team of managers to make sure that precious tax dollars are invested wisely and well.

Right.  Forgive the disbelief.

Because of what we did, 95 percent of all working families will get a tax cut — in keeping with a promise I made on the campaign.

This one you keep?  THIS one?  Awesome you “non tax cutter”

And I’m pleased to announce that this morning, the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks — meaning that by April 1st, a typical family will begin taking home at least $65 more every month.  Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans.

But as important as it was that I was able to sign this plan into law, it is only a first step on the road to economic recovery.

Aaaahhh, here comes the punchline.

And we can’t fail to complete the journey.  That will require stemming the spread of foreclosures and falling home values, and doing all we can to help responsible homeowners stay in their homes, which is exactly what the housing plan I announced last week will help us do.

Serious?!?  Are you F$%#ckin’ KIDDING me?  Do you read the papers?  Do you READ what is going on?  Do you have a CLUE as to what got us in this mess?  Home ownership?  Come on man!  Stay out of the way.  Let the market clear.

It will require stabilizing and repairing our banking system, and getting credit flowing again to families and businesses.  It will require reforming the broken regulatory system

Google “Mark to market” you regulatory guy you.

that made this crisis possible, and recognizing that it’s only by setting and enforcing 21st century rules of the road that we can build a thriving economy.

And it will require doing all we can to get exploding deficits


Thank you.

under control as our economy begins to recover.  That work begins on Monday, when I will convene a fiscal summit of independent experts and unions, advocacy groups and members of Congress, to discuss how we can cut the trillion-dollar

Pssst.    It’s now well over 3 trillion on it’s way to 7.

deficit that we’ve inherited.

It was the Senator YOU that gave this heapin pile of shit to the Blessed Leader you that is now talkin’ about it!  Dude.

On Tuesday, I will speak to the nation about our urgent national priorities.  And on Thursday, I’ll release a budget that’s sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline.

No single piece of this broad economic recovery can, by itself, meet the demands that have been placed on us.

This I agree with.  Nothin you do is gonna do the trick!

We can’t help people find work or pay their bills unless we unlock credit for families and businesses.  We can’t solve our housing crisis unless we help people find work so that they can make payments on their homes.  We can’t produce shared prosperity without firm rules of the road, and we can’t generate sustained growth without getting our deficits under control.  In short, we cannot successfully address any of our problems without addressing them all.  And that is exactly what the strategy we are pursuing is designed to do.

None of this will be easy.  The road ahead will be long and full of hazards.  But I am confident that we, as a people, have the strength and wisdom to carry out this strategy and overcome this crisis.

Careful.  We elected a no name Senator with zero experience and a past history of foolish policies.

And if we do, our economy — and our country — will be better and stronger for it.

Thank you.



The word was the mantra of Our Blessed Leader’s campaign.  And it was wonderfully successful.  It served to distinguish that what we had was bad.  And further, that we were going to a place where what we had would not be.  That somehow, we would be in a different place.  Further, the assumption would be that it would not only be different, but better!

And so it was.  The Blessed Leader now sits enthroned in DC and things have CHANGEd.  We have CHANGE and the world is right again.  Perhaps Atlas shrugged, but we got him back under control!

Interesting thing, though, that CHANGE.  See CHANGE doesn’t really mean change see.  It just means, well, it means – The Same.  At least as far as Detainee Rights are concerned.

Paragraphs rendered:

President Barack Obama’s Justice Department sided with the former Bush administration on Friday, saying detainees in Afghanistan have no constitutional rights.

Shocker.  And while I think the Administration is right here, I am shocked, just SHOCKED I tell you.

“The hope we all had in President Obama to lead us on a different path has not turned out as we’d hoped,” said Tina Monshipour Foster, a human rights attorney representing a detainee at the Bagram Air Base. “We all expected better.”

Serious?  You did?

“They’ve now embraced the Bush policy that you can create prisons outside the law,” said Jonathan Hafetz, an attorney with the American Civil Liberties Union who has represented several detainees.

Anything that pisses off the ACLU is good in my book.  Full CHANGE ahead for me, please!

I Wish We Had a Cool Governor

Now, don’t get me wrong.  I don’t have the same feel for the Good Gov’na Purdue that I have for Obama; not even close.  But how nice it is to listen to some of the best conservatives in the country talk about the stimulus package:?

Louisiana Gov. Bobby Jindal, a likely 2012 presidential contender, has said he would reject a portion of the money aimed at expanding state unemployment insurance.

Notice the level of detail intimated by Jindal.  He is not rejecting all of the money, just that money that speaks to unemployment insurance.

Gov. Haley Barbour, R-Miss., said he was considering a similar move. Taking the unemployment dollars, he said, would force his state to eventually raise taxes when the stimulus money runs out, putting in place what he called an unfair tax on employers.

“There is some (money) we will not take in Mississippi. … We want more jobs. You don’t get more jobs by putting an extra tax on creating jobs,” Barbour told CNN’s “State of the Union’ on Sunday.

Again, very detailed analysis of the package.  These guys know the good from the bad; almost as if they–you know, READ the bill.

Michigan’s Democratic Gov. Jennifer Granholm said there are other states that want and need the new money: “We’ll take it. We’ll take your money.”

States with unemployment rates significantly differ- ent from that of the U.S

States with unemployment rates significantly differ- ent from that of the U.S

Guess who’s state is that highest bar, just left of center?  Yeah, that’s right.  The Great State belonging to Gov. Jennifer Granholm.  That, by the way, is not an accident.

At issue for Jindal and Barbour is a provision in the stimulus bill that could allow people ineligible for unemployment benefits to receive them anyway. That could eventually force a tax increase on employers, both governors have said.

Nice.  So even if the state doesn’t want the money, the Federal Government forces them to take it anyway.  And they have to raise taxes as a result.  How is this legal?

Some Democrats took a harder line at a press conference arranged by the Democratic Governors Association to praise Obama for his leadership on the stimulus. DGA Chairman Brian Schweitzer of Montana and Maryland Gov. Martin O’Malley dismissed GOP detractors as “fringe” Republicans eager to score political points.

“All of us are committed to working with President Obama to pull our nation’s economy out of the ditch that George W. Bush ran it into,” O’Malley said. “If some of the fringe governors don’t want to do that, they need to step aside and not stand in the way of the nation’s interests.”

Sorry, but when you complain of “fringe” Republicans and then say “pull our nation’s economy out of the ditch that George W. Bush ran it into” you lose some all credibility in my book.

The line drew a rebuke from Sanford, the Republican Governors Association chairman.

“I think in this instance I would humbly suggest that the real fringe are those that are supporting the stimulus,” Sanford said. “It is not at all in keeping with the principles that made this country great, not at all in keeping with economic reality, not in keeping with a stable dollar and not in keeping with the sentiments of most of this country.

Finally, Republicans acting like Republicans.

They Will Never Learn

Okay, okay.  So I get it, I mean, who doesn’t?  In fact, who could miss it?  The whole world, literally, is in some form of economic downturn or another.  Much, if not all, of this can be laid at the feet of the real estate or housing bubble here in the United States.  It was, after all, the inflation of homes that caused banks and other lending institutions to over extend themselves and take on some really really bad investments.

Now, if you wanna get into any form of political blame game, you can.  Either it is the republicans for “de-regulation” or it’s the democrats for the Community Reinvestment Act.  Maybe it’s democrat ssenators refusing to reign in Frannie and Freddie.  Heck, maybe it’s republican senators failing to reign those guys in.  Whatever, the point is, some form of government “tampering” led the housing markets down the path they have taken.  And the result is, well, the result is where we are today.

So, the lesson?  The lesson, of course, is to just let stuff be.  Especially the housing markets!  Just don’t touch ’em right now!  For gawd’s sake, don’t touch ’em.


Anyone listening?

Cricket.  Cricket cricket.

Nope, they aren’t.  And here is the proof:…

Paragraphs rendered:

A report being considered by Chatham County commissioners says that recent development trends have divided the county and priced people out of some areas.  In recent years, the eastern half of the county has seen a housing boom, with development springing up close to areas such as Cary and Chapel Hill. Meanwhile, experts say, the western portion of Chatham hasn’t seen that same growth.

This happens all the time.  Certain land areas experience higher growth than others.  As the demand for those land areas increases, that land becomes more expensive.  The county needed top study this?

“The homes that were being created were for people who were in a higher-income category,” Commissioner Carl Thompson said.

Ahh, well, maybe not.  Seems that that intuit what’s going on.  Good.

Real-estate broker Katy O’Leary said that weekly, she has to tell some customers that they can’t afford a home in the eastern part of the county. Home prices there run from $350,000 and up, she said.

I suspect the same is true of Jaguar dealers.  Some people can afford homes in expensive neighborhoods  Others can’t.

O’Leary said the disparity of housing prices has an easy explanation: “The dirt’s too expensive.”

High lot prices force developers to build mostly only higher-end homes, she said.

Amen sista’!  End lesson on Econ101.  Wait, what?  They aren’t happy with this?

We could “actually require developers, maybe, to set aside certain portions of their development as lots for moderate-income homes,” Thompson said.

So, here we are.  In the middle of an economic housing bust, one we are trying to fix by ridding ourselves of a housing glut, and we are going to ADD to the complexity by mandating builders build homes on property they otherwise wouldn’t.  The result?  Somewhere, someone will be paying more for a home than it’s worth.  Sound familiar?


I am My Neighbor’s Keeper

North Carolina is somewhat unique in the region, heck, the country, as it relates to annexation laws.  North Carolina allows it’s cities to annex neighborhoods and developments without having to obtain the permission of those residents.  Further, there are no guidelines that the city must adhere to that could possibly allow this practice to help those folks who could really use it.  For example, when the city looks out over it’s borders and sees a new development being built, it can–and does–look into the nature of that development.  What is the mean value of the property?  What type of infrastructure facilities are being built into the development?  The roads and street that serve the development; are they being built in such a manner that would allow the city to assume them without additional cost?

And so it goes, each development has next to it’s name a score, or value.  If and when the city feels that it requores to expand it’s tax base, it just opens that dirty little black book and find the best fit.  And this best fit is the one that brings the most money into the city with the lowest political cost.  How do we know this is true?  Just look at the types of properties and neighborhoods that get annexed, and then look at those who don’t.  In fact, it’s these low value neighborhoods that aren’t brought into the fold even when they WANT to be annexed.

Proponents of this type of annexation will claim that the State’s cities are free of blight, that the services offered by the cities can expand and that, in general, the cities are much more “healthy”.  While it’s certainly true that more programs can be initiated when the tax base is in growth, it’s also true that many of those programs are unnecessary and grossly inefficient.  It’s always better to have less government than government thinks it needs.  So, if that government looks to increase it’s tax revenue, either through tax rate hikes or just more people paying taxes…beware.

The Two Best Laughs of the Day

And both are right here:

This has to be the best URL ever!

LOL.  Serious.  LOL.

I mean, really.  If someone sent that to me in email, I would think it was a hoax.  But the URL is only the second best laugh of the day.  The top laugh of the day is the page display when you actually go looking for


In Related News

This is just the kind of reporting that makes me upset.  How are people to understand what is really going on when our press and our broadcasters continue to deliver this type of information to people.  I have quoted the entire article below:

New jobs part of stimulus package for N.C.

North Carolina could gain 105,000 new jobs as a result of the economic stimulus package, according to a White House estimate released this morning.

The White House said the figure for each state was compiled by analyzing “detailed estimates of the working age population, employment, and industrial composition of each state.”

The release does not provide any details on what sort of jobs would be created.

And in related news, I plan to date Britney Spears.

What 400 Bucks Is Gonna Do

Recently I was part of a small conversation regarding a portion of the tax cuts in the new Stimulus Package.  The subject that got us all going was, well, the headline you see at the top of this very post; what 400 bucks is gonna do….  Now, to be clear, I think that what we were talking about was the portion of the tax cuts that President Obama refers to as tax cuts to 95% of working men and women; $500 for an individual, a $1000 for a family.  At least that’s what I think the reference is, though, to be fair, I’m not sure.  For example, I don’t know where 400 came from, as I mentioned, I though the Obama tax cut was $500…anyway, I digress.  The point is, we had a good conversation.

Here is my case.

The Federal government levies taxes on individuals in the form of individual income tax.  As far as I know, there are no other taxes on individuals that the Feds have claim to.  Sales tax is a state tax, state income tax is, well, levied by the state.  Vehicle, property, city and county taxes…all non-Federal.  FICA and Medicare, not taxes.  These are with holdings that fund programs or specific funds.  They can not be used for other purposes, and if those programs or funds went away, so too, would the withholding.  FICA , after all, is is really just shorthand for Federal Insurance Contribution Act.  In this specific case, Social Security is really just an insurance program.  Anyway, point is–not a tax.

That would mean, for the Federal government to say that it is giving a tax cut to 95% of working Americans, he would have to reduce the rate of the tax.  For example, if an individual is being taxed at 28%, to realize a tax cut, she would have to see her rate go down, 27% or 20%. That’s a tax cut.  What is not a tax cut is when an individual who currently pays no amount of money to the Federal government gets a check from Uncle Sam.  It is something.  And if it’s a grand, it’s not insignificant.  But what it’s not, is a tax cut.

And this is why it’s important.  It’s important because it has clear and critical ramifications, when dealing with a struggling economy.  It is NOT important because of the partisan bickering going on.  We have all heard the arguments going back to the election from the Democrats that Obama was offering a tax cut and The Republicans claiming it was just income redistribution.  That’s not why it’s important.  Where it really really matters is in how the recipients SEE, or perceive, the additional money.

You see, when I am chugging along in my normal economic way, I do just that–chug along.  I buy near the same kinds of groceries at near the same amounts.  I drive about the same kind of car and get it washed at about the as often as I always do.  I go out about the same number of nights and have about the same number of beers.  But now, let’s say that something changes.  Let’s say that I get a check back from my insurance company; my rates went down and they have overcharged me for two consecutive 6-month periods.  I get $500.  How do I spend that money?  It has been shown that the typical person spends it in one of two ways – They pay down debt OR they go on a 1 time splurge shopping spree.  So, VISA gets it or Best Buy gets it.  And then whamo, right back to the normal way of spending money.  Point is, there is no sustainable economic jolt in either paying off VISA or buying that flat screen TV.

Now, let’s say that instead of a windfall [the insurance overcharge check], I get a raise.  This presents me with a new way of looking at the money coming into me.  I view this a sustainable income, an item that I can budget for and count on.  I know it’s going to be there next paycheck and the paycheck after it.  This affects my spending in a much different way.  It sustains it.  I am more willing to up what I buy and/or how often I buy it.  I may not ration myself to a 6-pak.  Perhaps I can up how often I get a new car, or new jeans or new whatever.  Further, because it is not presented to me in a lump sum significant amount, the chances that I sink it into debt reduction is less; I actually spend it.  In this case, the economy is better off.

Now, for the whammy.  If, instead of giving me, a worker bee who concerns himself with just me and mine, a $500 bump, what if 20 people like me DIDN’T get the money but it went to a small business owner who was just thhhhiiiiiiisss close to obtaining the money to hire one more guy.  Or buy that new processor in his assembly line.  What if that 10k went to someone who GREW the money, who took it and turned it into 15k, or 20k AND gave someone a job because of it?

It is because of these reasons that fiscal conservatives don’t like the tax cut language in the stimulus package.  Not because Obama thought of it, or because Pelosi pushed it.  Or because no republican voted for it.  It’s because it’s moving money around in a way that does not grow said money, and it denies the recipient the critical perception that it’s sustained.  And further more, if you want to grow the economy, it’s not putting it into the hands of people who grow money.

The Recession – How Bad Is It: part 3

Okay, back to the recession and the economic numbers.  CPI is widely considered one of the indicators of how well -or poorly- the economy is performing.  So, if you are like me, you may ask:

What is the Consumer Price Index (CPI)?

The consumer price index (CPI) is the most widely used measure of consumer price inflation. The CPI measures the average change over time in the prices paid by urban consumers for goods and services. The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor collects the CPI price information and calculates the CPI statistics.

Thanks to the Seattle Government

So, basically, the CPI is a value showing how inflation is impacting the cost of stuff that you and I buy.  So, let’s take a look:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2008 0.4 0 0.3 0.2 0.6 1.1 0.8 -0.1 0 -1 -1.7 -0.7

Or, graphically, it looks like this:

cpi-2008Notice that I have changed the graphical representation some.  Most graphs of the CPI show the % change from the month prior, in that case, the graph looks like this:


Now, the reason that I shifted the data is to show that while the CPI seems to be rising from November to December, what it really is doing is shrinking by a smaller number.  Further, unless you take the data and put it into real world terms, it’s hard to understand.  For example, CPI measure the cost to us of stuff that we buy.  So, if I was in the market for a Digital Picture Frame that cost $100 at the beginning of the year, I could roughly expect the price of that frame to fluctuate according to the top graph.  That is, it would cost more than $103 dollars in the summer, but, then in December, it would be just under $100.

So, in terms of how much stuff costs, right now -latest numbers go to December 08- the cost of goods and services that consumers buy is just under what it was in January 08.  Not bad.

An interesting comparison.  Anyone care to guess what the below graph is tracking?


If you said the price of gas, you are right.  The above is the cost of gas in cents, and notice just the shape of the graph.  Gentle rise followed by a steeper increase ending with a cliff at the end of the year.  Further, the height of the gas crisis, according to this data, is July.  Yet the height of the costof my picture frame was in August.  I am guessing the price of goods is going to track very closly the cost of getting it from where it was to where you are; shipping costs.

The larger point is this:  The CPI is not showing this current recession to be any worse than any of the data we have seen in the last 60 years.  In fact, just looking at the data we are seeing that the price of “stuff” is getting cheaper!  And that’s pretty good news these days.