How To Be Wrong...

A philly.com commenter says:

I think this needs to be expanded. Let's look at all assets of food stamp and welfare moochers. Have a social worker show up unannounced and count, the cell phones, LCD televisions, X-Boxes, Designer Clothing, rims, tinting and sound systems on the exempt cars, earrings and chains to come up with the asset test. In addition to drug testing, they should be forced on to birth control.

Our safety net is now a hammock for the welfare class. Our government has enabled people to be lazy. You have to ask why should these people getting benefits go out and work? Currently with all of the state and federal benefits you can get:

Free Healthcare (Medicade)
Free Housing (Section 8)
Free Food (Food Stamps)
Free Education (Public Schools or Grants)
Free Cash (Welfare Payments)
Free Cellphones (Assurant Wireless)
Free Utilities (LIHEAP)
Free Birthcontrol (Thanks Obama!)
Free School Meals (Federal School Lunch Program)

Not too shabby!! The funny part is people like me an by [sic] wife who are in the evil 1% pay for this stuff. And I am really getting tired of it!

This is an interesting post. Paragraph one hits all the stereotypes for welfare recipients, including plenty of dog whistle ones...perhaps so that poor whites on welfare know this poster doesn't mean them. Also, note that he wants forced birth control then later bitches that they get birth control for free.

Paragraph two makes a rather outlandish, though false claim (it's a wonder that anyone not on welfare believes those who are have such a cushy life). Then he asks a rather serious question: why should a poor person work?

This is the real issue, and a real problem. If you are poor, there is actually very little financial incentive to work. There is a self esteem reason to work, but the second that you have, say, a medical emergency even that would go out the window. These programs going away at certain income levels corresponds to an infinite marginal tax rate at that income point.

So this poster clearly understands the problem in how the US handles welfare and it's inherent disencentive to work, so you would think that he would then want to reform welfare programs to fix this, but you would be wrong. He just wants to bitch and moan, and kick anyone he doesn't like off welfare, listing off all the evil money sucking programs that those lucky poor, unemployed people have...Also, free public schools? Really? Because, you know, those are available for everyone, including the children of the 1%. If they aren't good enough for your kids, then maybe you should want to improve them.

This is frustrating because while he clearly understands the problem--other than the school thing--he doesn't actually want to fix it, he just wants to make sure that poor people suffer even more. The thing is that there is a fix, and one that doesn't doom us to a society with a permanent poor class, but it runs counter to just about every bit of conservative orthodoxy out there: expand welfare so that you are not penalized for work/success.

So long as we believe that Americans shouldn't starve, shouldn't be forced to live destitute lives, and shouldn't have to be fortunate enough to be born to not-poor parents to have a chance at a decent life, then we need a welfare system that ensures those things. But if that welfare system is not generous enough to actually help people out, then it will keep them as a permanent welfare class. The only way to get people off welfare is for welfare to be sufficiently generous that that can happen.

The single biggest help to welfare and America would be guaranteed medical coverage for everyone (e.g. single payer). That is the single biggest line item in asshole commenter's bitchy list. Next is to improve education. It is already free through high school--though not very equitably distributed--it should be free through (state) college as well. Most of the rest of his bitchyitems are small potatoes, and are actually pretty well managed and setup compared to the first two. Housing is probably the third thing on the list in terms of dollars, though SNAP is probably higher in terms of priority.

As for his list of things poor people have but shouldn't...
5 year cost of Xbox with a dozen total games plus a 40" lcd to play them on: ~$800
1 year, cost of groceries for a single, relatively thrifty adult: over $1000

Food isn't very expensive, but it costs a lot more to eat than it does to play video games, even on a fancy television. One would think that someone from the 1% would be aware of this...particularly since he probably spends more than $250/month for just his share of the food eaten.

Asset Test for Food Stamps

It's a really bad idea for myriad reasons, but PA is apparently getting on with it. Someone under 60 with at least $2000 in assets gets no food stamps. Even if their income is $15k/year. This is counter productive: it discourages saving, it discourages participation in the economy. It encourages lying and deceit (and probably drug/alcohol use, if that $1000 saved up is going to count against you, why no use it to buy a mess of liquor?).

It is particularly bad as $2000 is not a lot of money. It isn't bad for a month, but even a cheap rent is likely to run $6000/year. Forcing people to spend their meager savings and sell off assets before they are allowed food stamps is just another way of driving more people into greater poverty. Oh, and all the effort it will cost the state to ensure that people aren't committing "fraud" could well cost more than we save. Dumbasses.

Also, too, Philly.com showing that it still has some of the worst excuses for human beings filling up the comments section. I have no love of drug use, but how horrible a person do you have to be before you start to demand drug testing for welfare recipients? Like it's not bad enough that they are impoverished and addicted, these people think making them suffer more will, what exactly? Make them rethink their life choices? Go get cleaned up and start running a business? How disconnected from reality are these people?!?

Japan's Lost Decade

I should post one of the counters to the NYT piece from yesterday. Japan really is in a lost decade, and they do have major problems. But we are headed toward being worse.

Depressing GOPers

I would absolutely love to get a Republican candidate that I could vote for, because I am so upset about the Obama administration that I could breathe fire. Unfortunately, Huntsman has no chance, and the rest of the field is either crazy (pretty much everyone other than Huntsman and Romney) or so untrustworthy that they may as well be (Romney).

Obama has been a mediocre president, but a horrible Democrat. If he called himself a Republican he would be a very good president, and a very good Republican, even with the exact same record. But the thing is, we need a good Democratic party to create a good Republican party, so if we are going to have a conservative president, that person had better be a Republican. Since Obama has been a very conservative president, he needs to go. It's just depressing that the Democratic party (including Obama) have co-opted so many GOP ideas that the Republicans have to be borderline crazy to differentiate themselves.

It's also rather depressing that I'd rather 4 years of crazy followed by a good Democrat than 4 more years of Obama.

Debt Increase

I'm a bit curious about the numbers here. If I charge $500/mo. on my credit card, but pay that all off each month, and then, in the run up to Christmas, charge $2000, but still pay it off, does that track as a $1500 increase in my debt despite the fact that it got paid off?

I suppose that, despite paying it off every month, technically, I am indebted to the credit card company for the various amounts that get charged, but it doesn't seem like a very good measure (in this type case).

While it's true that any financially savvy individual with enough income to cover his/her expenses would put whatever possible on a rewards card and pay that off entirely each month, I would still guess that most credit card debt is revolving. I haven't really seen if/how those numbers are dealt with, but would really like to know.

Mall Vacancy Rate Dropps a Bit

Of course, it's still very high. I wonder, though, if this is something that, after a bit of recovery (if the economy undertakes a real recovery) is going to get worse going forward.

Lots of retail is shifting to online. There are still things that people really prefer to go to a store to purchase: groceries and clothing come to mind. And there are service oriented retail spaces that will continue to be in demand, like restaurants and dry cleaners. For a lot of stores however, online just makes more sense. Electronics, cooking utensils, toys, tools and more are all easier to find and almost always cheaper online.

There is a very neat game store walking distance from me, they are likely to get only a very small fraction of my not very large amount of business. Even in the older/second-hand game market where a place like that used to be able to thrive, Ebay and 3rd party Amazon vendors are crowding out.

Even the box stores are going to have difficulties. There will always be a place for a Wal Mart or Target (though probably fewer than we have), but I don't see how a Best Buy can survive long term. They would probably have a better future in smaller retail spaces, where they would have a few things on hand along with a computer connected to their online inventory. Basically serve as a Radio Shack plus a location for large items to be picked up for the many people who can't have a 46" tv mailed to their house.

Japan's "Lost" Decade

Really wasn't all that bad. Even pre-US housing bubble burst, a person living in Japan had a better past decade and a half than one living in the US. Not that you'll hear much of that on the TV.

Also, too, Bleach.

Rent vs. Buy Redumb

There is certainly some sense in this article and the facts aren't wrong or bad but...

[Robert Shiller] compiled data in 2006 showing that between 1890 and 2004, the return on investing in houses was just 0.4 percent a year—a period when the stock market grew at 9.6 percent annually. And in a paper this June in the journal Real Estate Economics, two researchers calculated that over the past 30 years, most often it would have been better to rent than buy. Renters who invested in stocks and bonds instead of home equity came out ahead 75 percent of the time.

I know I'm rehashing here, but the calculation for rent vs. buy is not hard, and has next to nothing to do with the stock market. I'll deal with the second part first since every time I hear someone compare housing to the stock market I want to beat them with a copy of the Wall Street Journal (a much better use of the Journal than reading it).

If you rent instead of buy, then all of your mortgage payment doesn't suddenly go into the stock market. A decent fraction of that goes to a rent and is lost (-100% ROI!!!), so getting an extra 10% on the remainder doesn't really offset unless the rent is much much less than the mortgage. This should be to keep in mind, but just, so often: FAIL. You must live somewhere. If you are comparing buying to renting then you need to keep track of ROI of buying vs. ROI of RENTING, not the fucking stock market. The stock market only enters in with the extra, and then only if you can guarantee that you will park all the extra in the stock market and not just some of it.

The ROI for buying compared with renting is very dependent on not just the monthly relative payments but also the length of stay, and possibility of selling/renting. If you are going to be someplace for 2 years, buying is likely a very bad option. Between closing costs, very low principle payoff and generally very little appreciation, you are likely to lose money, more so than if you were to rent. The exception here is if you can buy a house/condo that you could then rent out after that, in which case, it may still be the better option.

I'm not going to rehash the rest of the ROI work or rent vs. buy since it is available here and here and here. I really just want to make clear, that, from reading them, any article that talks about renting being better than buying is really just making that case as buying as a substitution for other investment, not as a substitution for renting (no matter how hard they try to do this).

CAFE Standards Are CRAP

The proper solution is an increasing and substantial gas tax, but politicians are spineless whelps, and thralls to the auto and oil industries so we get fuel efficiency regulations that probably won't increase fuel efficiency.

Middle Class White Guy Here

Speaking as another middle class white guy, Gene Marks is a tool of highest order. It's still mind numbing to me that that level of stupid gets such prominent locations to spew their idiocy. Fortunately, Angry Black Lady did an excellent take down.

Dollar Coin Problem

So the US has $1.6 billion in dollar coins sitting idle because people don't use them. The solution they are going with is to effectively stop making dollar coins. The proper solution, of course, would be to stop printing dollar bills.

Dollar coins would actually be cheaper in the long run than bills, because even though they cost much more to produce they last much, much longer in circulation. I wish I could find the study but my memory is that a $1 bill has a circulation life of maybe 3 months. A $1 coin would be much more like a quarter (if not longer) at 20 years. So figure at least 80 bills will need to be printed for every 1 coin.

Further, ending $1 bills could be an economic stimulus. Currently there are lots of vending and other machines that are designed to take $1 bills but not $1 coins (many now take both), they would need to be swapped out, which means companies like Coke putting more money into the economy than they need to at present.

Also, for all those worried about strippers and G-string problems: pretty much every civilized nation on the planet uses coins for the rough equivalent of $1 and $2 and they also have strip clubs so it certainly works.

This fits nicely with my End the Nickel (and End the Penny) "campaigns", and thinking back on ending the nickel, the odd thing is that, since we have a $0.25 piece, you there are only two denominations that are excluded with no nickel: $0.05, and $0.15. Any other amount of change can be made with just dimes and quarters...and if someone were really picky, if there is at least $1 available to break even the 5 and 15 cents can be covered. I really like losing the nickel.

Global Warming

Deniers apparently operate as a very efficient comment mob whenever some relatively popular website puts up a story/post saying that anthropogenic climate change is real. Fortunately no one reads me :)

Science of Anti-Science Belief

I really enjoyed reading this article.

Germany = Botswana

Has some pizazz, doesn't it? It's kind of true what MattY is saying in this post, but the gold standard comment (third) is probably a better comparison. If the ECB is not going to act as lender of last resort, then the Euro really isn't functional.

Incidentally, the first commenter on Matt's post doesn't seem to understand fiat currency or the "lender of last resort" function even a little. It isn't--or at least shouldn't be--possible to be insolvent if you print and borrow in your own money (i.e. have fiat currency) but that requires the entity that does print your currency be a lender of last resort.

Generational Leadership Failure

An excellent article here on the leadership vacuum that is the Baby Boom generation. He talks about the generation before the boomers having done amazing things while:

Our parents’ generation has balked at the tough decisions required to preserve our country’s sacred entitlements, leaving us to clean up the mess. They let the infrastructure built with their fathers’ hands crumble like a stale cookie. They downgraded our nation’s credit rating. They seem content to hand us a debt exceeding the size of our entire economy, rather than brave a fight against the fortunate and entrenched interests on K Street and Wall Street.

Paul "Cassandra" Krugman

If you read through this it seems a little boring. It just encapsulates a whole mess of ideas and thoughts gong around today, particularly among progressives. Then you see it was written in 1996, and just think "Wow!"

Prescient to say the least. Maybe the Obama administration should listen to that guy.

Maybe China Can Step Up

Krugman didn't provide a link, so I'm linking to him, but in that massive sentence quoted, Roubini says:

...the willingness of the policy makers to sweat blood and tears to avoid falling into the arms of the “Russian bear” was, for a while, unlimited...

This got me to thinking (dangerous, I know). What would really be helpful right about now would be the Soviet Union. Not Russia, but the big, bad, Communist-block-creating USSR. Imagine a world where Greece were failing as they are, and the Soviets were around to phone up Greece's PM and offer assistance. I'd imagine that the US, (West) Germany, UK, et al. would be throwing money at the small Baltic nation as fast as it could be printed.

But we don't live in that world anymore. If Germany insists that the Greek people suffer, then they will. The US/UK may prefer a bailed out Greece, but really prefer to keep Germany happy. There isn't a competing alternative that Greece can go to that would force the other Eurozone nations to act humanely. Their best alternative is to leave, but they don't want to do that either, so they are stuck.

I wonder what would happen if China were to recognize how cheap it would be to buy all of Greece's debt in exchange for some very favorable deals that would allow them better access to the Eurozone.

Bloomberg is the 1%

Yes, he's an ass hole. And yes, reading Matt Taibbi say so is very cathartic.

Obama Liberal or Conservative

No matter how Republican his policies are. Obama calls himself a Democrat and, therefore, any policy he sends to the legislature is--to all Republicans and most independents at the least--representative of the LIBERAL position. Also, too, Atrios and DougJ (at Balloon Juice).

[Big] Banks...Still Evil

I hope that Occupy Wall Street is causing this change in bank behavior. But I would be much happier if this works:

...several companion movements, such as National Bank Transfer day...“revitalized a citizen’s movement to take money out of the large Wall Street banks and to put it into community banks or credit unions.”

People should drop Bank of America like the bad bet they are. Here are current BofA rates of return for money market accounts:
Ponder, for a second, that they have a bracket for people with $2.5 million stashed in a money market fund. Then ponder that the rates are, across the board, abysmal. Now look at my little, local credit union rates:
The $5 to open share account returns the best rate possible from BofA. Even better, the rates at the other credit union where I am a member:
I get a better rate of return on $30 than someone at BofA with $30 million. Why the hell would anyone keep their money in a big bank? Back in the day--the '30's?--you may have had more security, but the share accounts at (these and most) credit unions are FDIC insured so there is no more risk here than at BofA. Also, too, these credit unions didn't need bailing out so what risk is present is, if anything, lower.