The More Things Change

A bit of corruption in Congress? Say it Ain’t So!

Democrats, like the GOP before them, refuse to give any real teeth to an Ethics Committee. Teeth means that you give an oustide group the power to investigate and penalize. As long as the fox guards the henhouse, nothing happens. Several members of Congress have been convicted of crimes without ever being reprimanded, not the best statistic for an ethics committee.

The Democrats have made strides in cleaning up some of the more obvious, but trivial, ethics issues in Congress, but have stopped short of true reform. And they are generally running things in a much more bi-partisan manner than the GOP did. The best you can say is that they’ve restored Congress to however dysfunctional is was before the Bushies came in and completely broke it.

Let’s look at energy policy: Ever since Opec in the 1970s, it has been a top priority of every Administration to reduce our dependence on Middle Eastern oil. Everyone with two functioning neurons knows the future of the country, and quite possible the species, rests with renewable energy sources like sun, wind, and water.

After a disasterous war in Iraq, and gas prices going to $4/gallon (still a good price), what has our government chosent to do? Invest in coal. We’ve decided to go back 100 years or so. Richard Gephardt and “a powerful roster of Democrats and Republicans” are giving away our futures.

An editorial on the subject.

Investing in Real Estate: A Little Math

I was reading yet another book about real estate investing and landlording, before yet again wussing out of the whole idea. Here’s the opening anecdote, labeled “Upside”:

Twenty-five years ago, my neighbor’s dad took a real estate seminar, and got into real estate buying. On the weekend he would buy properties, while keeping his full-time job. Instead of working only 40 hours a week, he began working 70 hours. Meanwhile, ever day at the dinner table his wife would say, “Get rid of those properties! They are driving you crazy and stressing you out. I just don’t know why you do it! Last month you made no money…”

Over a period of 20 years, this man bought houses, duplexes, and a small apartment building that had 80 units — all the while, he endured his wife’s criticism. He has since passed away and his widow now lives in a $2 million beach house in Florida in the winter and in her other property up north in the summer. Her net worth is about $8 million, all because of what she called her husband’s “headachy” rental property. Ironically, from his regular job, he received a pension worth only $400,000.

1) If this anecdote is actually true, his wife is clearly a total bitch.
2) This man gave up 20 years of the prime of his life working 30 hours a week on real estate, besides a full-time day job. He may not have known his children’s names. It quite possibly drove him to an early grave. So maybe his wife isn’t a total bitch, maybe she had a good point. He could have passed up some of those houses and duplexes and spent some time with his family.
3) How much was that labor worth? We don’t know how much his regular job paid, but according to this, the average US income is about $50,000. He worked an extra 30 hours, so that’s $37,500 worth of labor he put into this. If you invested $37,500 a year for 20 years with (for example) a 9% return, how much would you end up with? Over $2 million. Hm. Actually, that’s pretty convincing! That’s only a quarter of what he got through the real estate!
4) But of course we don’t know if it was unusually good market timing. Or much of anything to figure out if this is representative. I’ve read hundreds of stories about these great successes, but never any about the poor schmucks who blew their life savings in real estate.
5) And we don’t know how much of that $8 million was due to these properties. Probably most of it, but hopefully he was contributing to a 401(k), his residence was appreciating, his wife may have worked, etc.
6) (To be fair, I used 2005 income, 9% may be optimistic, I ignored inflation and taxes, so there’s some counter-arguments also.)
7) Why didn’t this guy quit his job after 10 years? By then, he must have been generating enough income from these properties.

The next section is titled “The Downside”. Here’s the only downside he can think of. “But like any other business in any part of the world, landlording has its rewards and it takes work.”

Okay, So I’m Addicted!

I’m addicted to Mrs. Freshley’s cupcakes, the cheap Hostess knockoff in the vending machines at work. They have become scarce for this last few months. I asked the guy who loads the machine if he could make sure to get them, which is pretty demeaning right there.

They put in a bunch over the weekend. My question is: Exactly how pathetic is it to buy all of them and then hoard them at my desk?

Mrs. Freshley Cupcakes

Update: I gave in. I took my change jar over and started feeding the machine. Unfortunately, it seems to accept only enough for the most expensive item, and then it stopped recording the money. I didn’t notice, and lost a good two bucks in there. Darn it! Strangely enough, when I got back to my desk forty-five seconds later, someone had left fifty cents for me they owed me, and then someone else stopped by with another fifty cents. Awesome karma!

Links o’ Interest

The worst everything in movies. Hilarious.

Animated Calvin & Hobbes.

Mr. Rogers is even nicer than you thought. Follow the links at the bottom also.

Ever wonder what happens to all those Mario’s who didn’t make it?

The US Government doesn’t follow standard accounting rules. Half of the dispute over whether Social Security is doomed or just fine comes from the fact that it’s revenues aren’t kept separate from other revenues, so the government spends the money it has promised future beneficiaries. (That’s what Gore meant by a “lockbox”, fixing that problem.) See my excellent Social Security treatises (1 and 2) for more details.

Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household.

See a convincing rebuttal from Dean Baker:

It tells readers that the debt comes to $516,348 per household. That number would sound somewhat less scary if the article pointed out that by the same methodology, future income comes to more than $6 million per household.

Is This a Hillary Hit Piece?

Today’s cover piece in the New York Times Magazine is “Hillary’s War”. Let’s take a look at it, shall we? We’ll start with the cover and lead before moving to the content.

The cover image: Unfortunately, the online version of the image doesn’t show up well, so I can’t show it to you. It has the words “Hillary’s War” in an enormouse font. The coloring of the letters goes from red to blue, a timeline is printed below and there is a key showing that the red indicates “Support war authorization” and blue represents “Supports war deauthorization”. Cleverly done, especially the red (GOP) and blue (Democrat) color choices, just in case it was unclear which party was on which side. The central message is unavoidable. She was for the war, then against it. She was with the Republicans, then the Democrats. Hillary is a flip-flopper. She changes with the wind. The whole image is constructed to transmit this one thought as clearly as possible.

Well, that’s not true, there’s another thought even more clear. “Hillary’s War”. It’s her war. That’s right, not Bush’s war, but Hillary’s. Not Roves, or Powells, or Blairs, or Tenets, or Rices, or Kristol or Kagan or Krauthammer or Safires, or Hasert or DeLay or Frist or McCains, but Hillary.

Subheads: The first subhead, “An examination of the senator’s voting, thinking and maneuvering on Iraq.” is not too bad, though the use of the word “maneuvering” is already painting the picture. The online lede is “Hillary Rodham Clinton’s decisions on Iraq may point to what sort of president she would be,” and inside the article the lead is, “Her support for the Seante resolution giving President Bush the authority to use force against Iraq remains a problem for the Democratic Party’s base. The way she arrived at that decision – and at subsequent decisions on Iraq – may point to what sort of president she would be.”

Only a little of that is true. There’s not one word in the article that points to what sort of president she would be. There isn’t an even an attempt to show how her thinking on Iraq points to what sort of president she would be. It simply raises the question. And by raising the question, it answers it – There’s something funny there. No, we’re not going to tell you what, but something stinks.

Before we even get to the meat of the article, the framing is clear. Hillary is a manipulative flip-flopper and she’ll do anything to be president. How many people see the cover of the New York Times Magazine? (Sunday circulation is 1.6 million.) How many of those ever read the first word of the article, much less read it all the way through? Much less.

The content: The content isn’t bad. It is highly factual, and avoids most of the poisoned phrasing that’s been laid out already. Still, it suffers from some serious problems, so let’s go through some of the main points.

1) Why didn’t she read the entirety of the National Intelligence Estimate, the definitive intelligence assessment of the Iraq situation? That’s a good point, she should have. On the other hand, only six senators did. So why single out Hillary?
2) She voted for the war. So did 77 other Senators, including all the leadership of the Democratic party.
3) She hasn’t apologized for her vote. I just find this weird. She has explained her vote, several times, and it hasn’t been reported. I’m glad Edwards did his mea culpa, but I don’t require it of every candidate. Again, why aren’t the asking the same question of other Senators? Oh, because she’s running for president, so she has to get on her knees and beg the public for forgiveness first. Grow up America.
4) She still voted for the war, even when some protesters asker her not to! One whole section is devoted to this incident. I have no idea why. The description of the group is that they “intended to ridicule the Bush administrations color-coded terrorism security alerts.” Anytime the word “ridicule” pops up in a groups mission, you can safely ignore it.
5) She voted against an amendment that would force diplomacy before invasion. Again, a good question, but 75 other senators voted against it also. Why single out Hillary? Amendments votes often don’t make sense unless you know what other amendments are out there and the context of the legislative rules. We aren’t given any of that information.
6) She’s a manipulative shrew, joining in the anti-war movement is dishonest ways. The strongest facts are against her here, putting her name on a measure at the last second when it looked good, and a couple other incidents like that. Still, it doesn’t add up to much.

Look, Hillary has always been more hawkish than the Democratic base. She bought into the administration line for too easily. That doesn’t mean she was the only one. Except for Russ Feingold, this article could have been written about any major senator. Like many others Hilary never foresaw what Bush would do with the authorization, she has since come out clearly against her previous stance, and there is just no reason to keep raking her over the coals like this. This was Bush’s war, plain and simple.

So, is this a hit piece? It’s a split decision. The article has a double-standard, but it is certainly fair to examine Hillary’s history with the war. Jeff Gerth and Don Van Natta Jr do a good job of laying out lots of facts, and there are many positive bits that I didn’t comment on. However, the editors who wrote the ledes and approved the cover unquestionably transformed this into yet another smear job by the New York Times on a Clinton. What else is new.

Terrible Testimonials

The other day I got some junk mail. It was from Foundation Capital, the usual junk. Pay off your house equity, then refinance it with as an option ARM with incredibly low monthly payments that can be made in four different ways. Nothing interesting there, I get these terrible offers all the time. This one stood out because of the testimonials.

I get a lot of mortgage company letters, but the letter from Foudnation Captial clearly showed me how I could get out of debt and regain control of my life. I spend the same amount monthly, but now a large sum goes towardsmy retirement!
James I..Certified Public Accountant

We do well financially, but we waste too much money. We explained this to our Foundation Captial loan consultant and he put togther a plan for us that paid all our debt and gave us one 15 year, fixed rate loan. That really put us back in control of our financial affairs.
David H…Financial Planner

1) So these financial professionals were both in serious debt.
2) Neither of them could figure out how to get out of debt on their own.
3) Both of them chose this method to get out of debt, which, by the way, is an excruciatingly stupid method and will leave them in worst debt than ever.

That’s a CPA and Financial Planner I never want to go to.