Whatever we are here for, if anything, we are not here to pile up loot. Unfortunately, our predicament is such that we cannot even agree about this!
Category: Money Matters
Why Are Italians So Good at Personal Finance?
Why are Italians and Americans of Italian extraction 'over-represented' — to use, sarcastically, an ambiguous word whose very ambiguity endears it to the politically correct — among the fiscally responsible? Ten reasons.
Sadly, two highly-valued male friends of mine, one a philosopher who does not hike and the other a hiker who does not philosophize, are either clueless or inattentive when it comes to personal finance, like most Americans. Why do they lack basic common sense about matters monetary?
Do I enjoy a species of 'white privilege,' namely, 'Italian privilege?'
My use of 'privilege' here is of course derisive.
Amazon Pricing
I just purchased via Amazon Prime
Australian Realism: The Systematic Philosophy of John Anderson Paperback – March 19, 2009
by A. J. Baker (Author), Anthony Quinton (Introduction)
I decided on a new paperback for $27.41 plus tax rather than a used hardcover. The used hardcovers start at $2,336.86. Even considering how vastly superior hardbounds are to paperbounds, that struck me as a wee bit steep.
Arizona and California Gas Prices
Big road trip last weekend: Phoenix, Barstow, Bakersfield, Santa Barbara and back by a different route. The Jeep Wrangler runs on unleaded regular. Paid $3.349/gal on 9/27 at Quartzsite, AZ off of I-10, one of the last Arizona gas-ups enroute to California. Wait 'til Blythe on the California side of the Colorado River and you will get 'hosed.' In Barstow, same day, I paid 3.579/gal at a Circle K. In Bakersfield on 9/30 paid $3.979 at a Shell station. Back home, yesterday, at Costco, $3.099/gal. Home, sweet home.
And the Sonoran desert is so much prettier than the Mojave! But all deserts are beautiful to questers and other oddballs.
Automotive Frugality
Keith Burgess-Jackson is one frugal dude:
I've had only three vehicles in the past 31 years: (1) a 1976 Oldsmobile Cutlass, purchased from my brother Glenn in May 1983; (2) a 1989 Pontiac Grand Am, purchased new in August 1989; and (3) a 2007 Honda Accord, purchased new in February 2007. How many vehicles have you had in the past 31 years?
In one sense old Keith has me beat. I've owned four cars during this time period: (1) a 1978 VW bus purchased used in spring '79; (2) a 1988 Jeep Cherokee bought new at Thanksgiving 1987; (3) a low-mileage, immaculate, 2005 Jeep Liberty Renegade 'stolen' used for a paltry $12 K on St. Valentine's Day, 2009; (4) a 2013 Jeep Wrangler Sport purchased new at Thanksgiving 2012.
So I've owned four vehicles during the period when Keith owned three.
But there is a sense in which I have him beat: I owned the Cherokee for over 21 years, whereas the longest he has owned a vehicle appears to be less than eight years.
The old Cherokee is celebrated in the first article below.
In my whole life I have owned only four cars, the ones mentioned and a 1963 Karmann Ghia convertible purchased for $650 from my half-brother in 1969. The license plate read: GOE 069. I kid you not. I sold it in 1973 when I headed east for grad school. I should have kept it. Just like I should never have sold that Gibson ES 335 TD. That was the dumbest thing I ever did.
Automotive Frugality and Manual Air Conditioning
This is an old post rescued from the old blog, dated 20 May 2007. Some things have changed. But all the details were true then.
…………………….
There are some people with whom I would not want to enter a frugality contest. Keith Burgess-Jackson is one of them. I seem to recall him saying that he doesn't own a clothes dryer: he hangs his duds out on a line in the Texas sunshine. Not me. This BoBo (bourgeois bohemian, though not quite in David Brooks' sense) uses both washer and dryer. But I have never owned an electric can opener (what an absurdity!), nor in the three houses I have owned have I used the energy-wasting, house-heating, noise-making, contraptions known as dishwashers. The houses came with them, but I didn't use 'em. In the time spent loading and unloading them, one can have most of one's dishes washed by hand. And tall guys don't like bending down. Besides, a proper kitchen clean-up job requires a righteous quantity of hot sudsy water.
So I'm a frugal bastard too. And on the automotive front, I've got Keith beat. His car is old as sin, but mine is older, as old as Original Sin. It's a 1988 Jeep Cherokee base model: five-speed manual tranny, 4.0 liter, six-cylinder engine, four-wheel drive, off-road shocks, oversized tires, and manual air conditioning despite the fact that I live in the infernal Valle del Sol — from which I don't escape in the summer like some snowbird wimps I could mention. Manual air conditioning: if you want air, you use your God-given hands to roll down the windows. In this part of the country manual A/C is also know to the politically incorrect as 'Mexican air conditioning.' 'Roll down the windows, Manuel!'
One blazing hot August I drove straight through from Bishop, California to Chandler, Arizona, 600 miles, alone. Stopping for gas in Blythe, on the California side of the Colorado river, I noted that the afternoon temperature was 115 degrees Fahrenheit in the shade. Bouncing along Interstate-10 I saw that the only people with their windows down were me and the Mexicans.
It's no big deal, really, driving through 115 degree heat in the middle of the day in the middle of the desert with the windows down. You take a bandanna and soak it in the ice water in your cooler and wrap it around your neck. When the dry blast of desert wind hits the wet bandanna some serious evaporation takes place cooling your neck and with it the rest of your body. Feeling a little drowsy after four hundred miles of nonstop driving? Stoke up a cheap cigar, say that Swisher Sweet that's been aging under the seat alongside those oily shop rags, and throw another audio tape into the deck. May I recommend Dave Brubeck? Or how about Kerouac reading to the piano accompaniment of Steve Allen? Or perhaps that latter-day beat, Tom Waits.
With four on the road, one in the hand, a cigar in the mouth, some boiling hot McDonald's drive-through java in the other hand, Brubeck on the box, proudly enthroned at the helm of a solid chunk of Dee-troit iron, rolling down a wide-open American road, with a woman waiting at the end of the line, you're feeling fine.
I bought the Jeep around Thanksgiving, 1987 and come this Thanksgiving it will have been twenty years. Expect another post in celebration. An old car is a cheap car: cheap to operate, cheap to insure, cheap to register. My last registration renewal cost me all of $31.39 for two years. My wife's late model Jeep Liberty, however, set us back $377.93 for two years. With a five-speed manual tranny, a six cylinder engine, and no A/C I can easily get 25 mpg. With a tailwind, 30 mpg.
So I don't want to hear any liberal bullshit about all SUVs being gas guzzlers. Your mileage may vary.
Americans are very foolish when it comes to money. If you want to stay poor, buy a new car every four or five years. That's what most Americans do. And if you finance the 'investment,' you compound your mistake. Buy a good car, pay cash, and keep it 10+ years. Better yet, live without a car. From September 1973 to May 1979 I lived and lived well without a car. But I was in Boston and Europe, compact places.
Philosophy and Livelihood
A reader asked about this and about 'going maverick.' Here is a post from five years ago, and it links to another. The comments may be of interest too.
The Fifty-Year War Against Poverty
An excellent piece by the editors of NRO. Excerpt:
The war on poverty has been conducted partly in earnest and partly self-servingly. No doubt programs such as Head Start were launched with a great deal of idealism, but as their ineffectiveness became apparent, it was not idealism that sustained them but political self-interest. Providing at best temporary relief to the poor, the permanent welfare bureaucracies benefit Democrats by creating thousands of well-paid positions for their political allies and subsequent campaign contributions for their candidates. Head Start today is a money-laundering program through which federal expenditures are transmitted to Democratic candidates through the Service Employees International Union, which represents many Head Start teachers. The National Treasury Employees Union, which represents, among others, the welfare bureaucrats at the Administration for Children and Families, is a large political donor that gives about 94 percent of its largesse to Democrats. This is not coincidental. The main beneficiaries of the war on poverty have not been and will not be the poor; the beneficiaries are the alleged poverty warriors themselves. The war on poverty is war on the Roman model in which soldiers are paid through plunder.
The result: a large and expensive welfare state that provides relatively little welfare, and a destructive and ruinous war on poverty that has not reduced poverty.
Financial Advice: Short Form and Long Form
Source. Excellent advice, except for the last item. But the advice is incomplete. For a rather more complete analysis, see Some Principles of a Financial Conservative wherein I proffer advice that is rock-solid, absolutely free, and that also has the interesting property that few will follow it due to the social and moral decline of the nation.
The article from which I borrowed the above graphic sports this delightfully amphibolous construction: "It's really hard to be poor . . . ."
Reading those words, I thought to myself, yes, of course, you really have to work at being poor in this, the greatest and most prosperous nation ever to exist, a country that needs walls to keep people out unlike the commie states that need walls to keep people in. Anyone can avoid poverty if they practice he practices the old virtues and works hard. But then I realized that that cannot be the meaning intended in a sentence to be found in the left-leaning Washington ComPost.
A textbook example of amphiboly, then.
The World’s Criterion of Worth
Something is worth doing if and only if one is paid to do it.
The theme is developed in Work, Money, Living, and Livelihood.
April 15th
Did you settle accounts with the Infernal Revenue 'Service'? If yes, then celebrate with The Beatles, Harrison and Clapton, and Tom Petty.
No, I am not opposed to paying taxes. I am not anti-tax any more than I am anti-government. We need government, and we need to fund it somehow. It does not follow, however, that there must be an income tax. A consumption tax would be the way to go. But that will never happen.
Why the Government Underreports the Inflation Rate
An excerpt from an instructive article:
Of course, the low inflation rate also provides the government with breathing room on the fiscal side. Low inflation keeps a limit on the increases that federal agencies are required to pay out to beneficiaries of programs such as Social Security. With the budget so tightly constrained by huge deficits, the low inflation data is essential to government planners.
More chicanery can be seen on the unemployment front. The government currently claims the unemployment rate to be at just 7.9 percent. But when calculating unemployment using the pre-Clinton methodology, SGS finds it to be around 22 percent. SGS does not exclude, as the government does now, all those who have left the workforce out of despair of finding a job, or those who who have accepted part time jobs in lieu of full time employment.
A world of politically manipulated 'official' statistics and misleading Government statements makes investment decisions more difficult. The result is that, despite falsely negative 'real' short-term interest rates and an abundance of debased cash, consumers and corporations continue to hoard cash. While the Dow has in fact surged in nominal terms, the leading U.S. equity funds continue to show significant outflows of investment funds. Rising stock prices have not convinced many Americans to get into the game. This should provide needed perspective on the current media euphoria.
A healthy skepticism about big government is as reasonable as a healthy skepticism about big business.
The Household Analogy
I saw someone on TV who claimed that comparing a deeply indebted household with the deeply indebted U.S. government is a false analogy. Why? Because the government, unlike the citizen, has the power legally to print money. No doubt that is true and a point of disanalogy, but what surprised me was that neither the speaker nor his listeners seemed to see any problem with printing money in response to a debt crisis. The problem, of course, is that when a government does this it in effect counterfeits its own currency and reduces the buying power of existing dollars.
This got me thinking about counterfeiting. Why can't I engage in my own private stimulus program? I acquire the requisite equipment, print up a batch of C-notes and then spend them in parts of town that I deem need economic stimulus. Better yet, I simply give out grants gaining no benefits for myself. Is there a difference in principle between illegal counterfeiting and the legal 'counterfeiting' that the government engages in? If they can 'stimulate,' why can't I?
But I'm no economist, so I may be missing something. I guess I don't understand how real value can be conjured out of thin air. In this electronic age, you don't even need paper and there needn't be any actual printing. Suppose the Benevolent Hacker breaks into your bank account, not to transfer funds out or to transfer funds in from a legitimate source, but simply to add zeros to your account. You are suddenly richer 'on paper.' You convert this new found wealth into new cars and houses for yourself. Wouldn't that stimulate the economy to some extent?
And then this morning I saw Krazy Krugman on C-Span, a.k.a Paul Krugman, writer of crappy op-eds for Gotham's Gray Lady, his worst and most vile being this outburst re: the Tucson shooting. Krugman is not at all concerned that the national debt approaches 17 trillion. After all, as he brilliantly observed, the U.S. has its own currency, and it can print money! Not one of the C-Span callers called Krugman out on the consequences of inflating one's way out of debt. Obama, said Krugman, "got cold feet." He didn't stimulate enough!
Meanwhile conservatives stock up on grub, gold, guns, and 'lead.'
Work, Not Welfare, Uplifts the Poor
Our aptly appellated (by Newt Gingrich) 'food stamp president' really ought to read this excellent piece by Peter Cove.
Bad Economic Reasoning About the National Debt
When I study the writings of professional economists I sometime have to shake my shaggy philosopher's head. Try this passage on for size:
$16 trillion is the amount of Treasury debt outstanding at the moment. The more relevant figure is the amount of debt the federal government owes to people and institutions other than itself. If, for some reason, I lent money to my wife and she promised to pay it back to me, we wouldn’t count that as part of the debt owed by our household. The debt owed to the public is about $10 trillion these days.
What a brainless analogy! Suppose I loan wifey 100 semolians. She issues me a 'debt instrument,' an IOU. Has the family debt increased by $100? Of course not. It is no different in principle than if I took $100 out of my left pocket, deposited an IOU there, and placed the cash in my right pocket. If I started with exactly $100 cash on my person I would end the game with exactly the same amount.
But I do not stand to the government in the same relation that I stand to my family. Suppose I buy 100 K worth of Treasury notes, thereby loaning the government that sum. Has the Federal debt increased by $100 K? Of course it has. I am not part of the government. Whether the government owes money to U. S. citizens or to the ChiComs makes no difference at all with respect to the amount of the debt. The citizens plus the government do not form a "household" in the way my wife and I form a household. Citizens and government are not all one big happy family.
The analogy is pathetic.
The author would have you think that "the more relevant figure" is $16 trillion minus $10 trillion = $6 trillion. False, because based on a false analogy.
This shows how ideologically infected the 'science' of economics is. Only a leftist ideologue could make the collectivist assumption that I have just exposed. The Marxian "From each according to his ability, to each according to his need" is a viable principle at the level of the family, but it is pernicious nonsense on stilts when applied to the state in its relation to the citizenry.