Browsing Category: "Politics"
Inconvenient Information
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Today I found that a site I visit on some occasion - economicindicators.gov is being shut down by the government due to “budgetary constraints.” I wondered how that is possible considering the $3.1 trillion proposed budget for ‘09.
This site was even rated by Forbes on their Best of the Web list in the Market Data category. It certainly can’t be that expensive to keep this site up and the value to cost has to be through the roof. The only conclusion I could come to is that this data is inconvenient. The administration is trying to paint a rosier picture of the economy and cold hard data doesn’t support that image.
Upset with this, I did a search to find out if I can get more context around this event. I stumbled upon The Carpetbagger Report. They mentioned this shutdown as well as several other actions to make inconvenient data unavailable.
* In 2005, after a government report showed an increase in terrorism around the world, the administration announced it would stop publishing its annual report on international terrorism.
* After the Bureau of Labor Statistics uncovered discouraging data about factory closings in the U.S., the administration announced it would stop publishing information about factory closings.* When Bush’s Department of Education found that charter schools were underperforming, the administration said it would sharply cut back on the information it collects about charter schools.
Regardless of political affiliation, this is disturbing. Government should move towards more transparency not less. Reducing public information is the characteristic of a closed society not a free one.
I encourage you to write to your congressman/woman to let them know this is not right. Last I checked that information is still available.
Your Wallet’s Worst Nightmare
Of course I’m talking about inflation, the silent mugger that robs you of your buying power.
Here’s an excerpt from a newsletter I receive from the President of Everbank World Markets:
The Fed has turned its back on inflation folks… And here’s some items that you won’t see in the CPI data…
1. Grade-A Large Eggs - Dec. 06 $1.54 a dozen… Dec. 07 $2.10, and current $2.73 a dozen… That’s up 36% in a year!
2. White Bread - Dec. 06 $1.13 a loaf… Dec. 07 $1.28 a loaf, and current $1.62 a loaf… That’s up 12.6% in a year!
3. Whole Milk - Dec. 06 $3 a gallon… Dec. 07 $3.87 a gallon, and current $3.93 a gallon … That’s up 29% in a year!
4. Fresh Whole Chicken- Dec. 06 $1.06 per pound… Dec. 07 $1.17 per pound, and current $1.19 per pound… That’s up 10.3% in a year!These are the things I talk about all the time, in that an individual can feel the inflation eating away at this wallet… This is just some simple food items… I’m not even talking about things like: Tuition… Insurance… Medical… Movie tickets… And so on…
The Bureau of Labor Statistics tells us that inflation is running at 4.1% a year. I guess things average out, but to an individual where the household’s largest expense is housing, auto/fuel, and groceries I can’t imagine that 4.1% would hold. It is just a hunch, but the last time I bought groceries with my wife (and paid attention) I thought she was crazy because the bread was $1.99 and the milk was $3.99. I told her “I swear milk is only 2 something and bread is under a dollar.” She pointed out that you can’t even buy generic bread/milk at that price. Certain I was right, I did the right thing and shut up and Google’d food inflation stats when I got home. Sure enough it was confirmed. I was living under an inflationary rock this whole time. Prices were stable for so long that I stopped paying attention to stuff like milk prices.
One thing to note is that much of the inflation in food is caused by transportation costs (fuel). High oil prices have a direct impact on food inflation. In fact it is felt more so in Asian countries where the rate of oil consumption is going up faster than the U.S. This is yet another reason why we must strive to encourage mass transportation, less urban sprawl, and alternatives to our oil-based vehicles.
The other factor that certainly can’t be dismissed is our monetary policy. The Fed cut rates down to 3.5% last week. I suspect that today we’ll be looking at 3.00% after today’s FOMC meeting. This will further stoke inflation and reduce the dollar’s value. Since most good we purchase are foreign it reduces our buying power. I guess a nice indicator to watch is to see if Wal-Mart keeps “rolling back” prices as our dollar devalues. I believe they are the largest importer of Chinese goods now of all the chains.
Well I mentioned food, but what about housing? Housing will be pumped up or at least not allowed to deflate with these current low rates. In addition there is some work going on to increase the FHA loan guarantee limits to upwards of 729K from a current 362K (for high cost areas). There is a general concensus that some areas of the U.S. such as San Francisco are as much as 30% overvalued. By passing this type of regulation the Fed doesn’t allow prices to come back in line. This gives the false impression that prices can’t fall. This is exactly the type of interest rate policy that caused the housing bubble in the first place. When I buy a stock at say $100 and then earnings don’t materialize, it may fall to $80. That’s the market. I don’t have the government stepping in to try to boost it back up. That just wouldn’t make any sense from an economics perspective. I sort of went on a tangent, but my point is housing inflation will continue as long as we keep printing money.
The 2008 Economic Stimulus Package
Looks like the economic stimulation package is going to pass through Congress. So this may leave you with a few questions: 1. How much do I get? and 2. What am I going to spend it on?
I can’t tell you what to spend it on, but if you want to get an idea of how much you might receive I found
The stimulus package does more than rebates.
The Package:
- To address the mortgage crisis, the package raises the limit on Federal Housing Administration loans from $362,000 to as high as $729,750 in expensive areas, allowing more subprime mortgage holders to refinance into federally insured loans.
- For consumers, up to $1,200/family
- The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment.
Notably Absent:
- No extension of unemployment benefits.
- Removal of ability of businesses incurring losses now to reclaim taxes paid in past years.
There are a few things that concern me. The rebate is slated to be 1% of our GDP. Now I really doubt that it will move the economy much. In fact most of our consumption is on foreign goods. Of course our economy is 60% services so a good chunk would get spent on domestic services. In any case I think it to be inefficient.
Another concern I have is the cost - $100 billion. Putting cash in the hands of consumers is not what I consider a stimulus. It is irresponsible at best. What really stimulates the economy is investment in capital goods. The 50% capital equipment writeoff is a good start, but I think more targeted tax cuts would do a better job then giving away cash to consumers. This is a stop-gap measure that at best will have a very short-term effect of delaying a recession or at best provide a few quarters of flat growth.
Mr. 911 - This is going to be ugly
I just saw a Rudy Giuliani campaign ad today on youTube. It was disgusting.
All I can say is, tell me you don’t want this guy in office. He’s a 1-trick pony and terror-monger. So how did he fair in Iowa?
“The Democratic Iowa Caucus began at 7 p.m. CT, January 3, 2008. Participants in the Iowa Caucus were as follows (in alphabetical order by last name).
Democrats: Joe Biden, Hillary Clinton, Chris Dodd, John Edwards, Mike Gravel, Dennis Kucinich, Barack Obama, Bill Richardson
Republicans: Rudy Giuliani, Mike Huckabee, Duncan Hunter, John McCain, Ron Paul, Mitt Romney, Fred Thompson
First in the Democratic caucus was Barack Obama, followed by John Edwards, then closely by
Mike Huckabee won the Republican process, followed (in order of votes) by Mitt Romney, Fred Thompson, John McCain, and Ron Paul. Rudy Giuliani and Duncan Hunter came in below Ron Paul, who took the last potential national delegates.”
-courtesy of wikipedia
So Giuliani did very poorly in Iowa. I would much rather have a current NY City mayor Bloomberg run. He’s good with money. He doesn’t need the money. He’s a billionaire. He seems genuine and he’s done a bang-up job with NY City. He has shown a focus on performance and accountability including his own. Read this NY Times article to see more about his performance. NY City is a tough city to manage. What’s the phrase? If you can make it in New York you can make it anywhere?
Interesting Ron Paul Marketing
I spotted this sign in the median outside our local target while driving. I did a double-take and did a u-turn to make sure I saw what I thought I saw. I did when I got home. Campaign 2008 should be interesting. He won’t be getting any new coverage unfortunately from Fox before Iowa.
