Tag: Money Management Mishaps

Only the Government Could Lose Money Selling Alcohol

I believe the government is the only entity on the planet that could lose money by having a monopoly on wine and spirit sales. It makes sense though considering that government agencies design their contraptions and “services” around politically correct ideals instead of consumer demands:

In a report issued today, Pennsylvania Auditor General Jack Wagner says the state liquor control board’s wine vending machines, a wonderful illustration of what happens when a government monopoly tries to act more like a business, are operating at a loss, costing taxpayers more than $1 million since they were introduced a year ago.

[…]

When they are working, the kiosks dispense a limited selection of wines at limited locations and times (not on Sunday, of course!) to customers who present ID, look into a camera monitored by a state employee, breathe into a blood-alcohol meter, and swipe a credit card.

I think I see how they’re losing money. When people want to purchase alcohol, like any other product, they don’t want to be hassled anymore than they absolutely have to be. In other words people want to walk in, make their selection, show their state issued identification, pay the cashier, and leave. Making a customer also submit to a breathalyzer test and having their image monitored by some hidden state employee are going to create a rather annoying hassle, especially when the selection of liquor is limited.

So Much Stupid it Hurts

Our old friend the broken window fallacy made a guest appearance on MarketWatch:

That said, the effects of the storm have the potential to boost the fourth quarter’s GDP by this much and more. This is because the need to clean up and rebuild will create numerous jobs — especially in the construction industry, which, as you know, is languishing from lack of activity in housing, shopping centers and office buildings.

Add to this spending on flashlights, batteries, generators, plywood and tools that would otherwise have not taken place. As these items are restocked, this will add to the GDP, as will the wages paid to construction, maintenance and utility workers.

You know what Mr. Kellner, I think your community needs economic stimulus. Would it be all right with you if I were to come over to your home, smash all of the windows in your house, and set fire to your car? Just think of all the work my arson will create for Home Depot, the local glazier, and the automobile company you’ll buy your new car at!

Stimulus Money at Work

Even though the intelligent economists (better known as Austrian economists) have been warning governments against the false hopes of Keynesian economics since Keynes first published his works nothing has changed. Although it’s been demonstrated time and time again that “public works” projects serve no purpose other than transfer taxpayer money into the hands of politically well connect companies without any actual benefit to the people governments still implement them.

I know the government is adverse to hearing the arguments put forth by intelligent people but how many times do the government’s failures have to be pointed out until the people wake up and realize something has to change. Let’s look at the fairly recent stimulus plan and it’s effect on the “green” energy market:

According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*

The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.

The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.

[…]

Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.

It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.

A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.

This is the result typical of government intervention in any market, they prop up the companies who are politically well connected which gives them an unfair advantage over those who lack such connections. In a majority of cases the politically well connected companies are also those that are incompetent (birds of a feather flock together after all) and lack profits (because people view profit making corporations as “evil” and “greedy”). The companies that are actually competent and provide goods that consumers want are left to flounder and eventually be killed off by their competition who can afford to outspend them now that they have that half a billion dollars in stimulus money.

But the most heinous piece in this puzzle is the fact that money stolen from taxpayers is used to fund these stimulus plans without delivering any benefit to those taxpayers.

The Answer to High Fructose Corn Syrup isn’t Taxation

It is often said that the difference between a good economist (also known as an Austrian economist) and a bad economist is that a good economist is capable of seeing the actual complexity of economic decisions and all of the different affects such decisions had. People who advocate government programs and taxes are bad economists because they can’t wrap their heads around the actual root of most problems, government.

A friend of mine send me a link to a petition that is trying to urge Congress to place a tax on high fructose corn syrup (HFCS). To many people this idea sounds grand because HFCS has been linked to an increase in obesity in the United States. What these same people don’t understand is why HFCS was every created in the first place. A bunch of companies didn’t get together one day with an agenda of trying to create an evil product that would harm customers (this seems to be what many people think), they got together because the price of sugar was much greater than the price of corn. Why was sugar so much more expensive than corn? Because there are taxes and quotas placed on imported sugar as well as governemnt subsidies for corn producers.

The combination of these two elements has create an ecosystem where it’s much cheaper to produce HFCS than to use natural sugar. Once again we find that the government is the root of a problem yet people want that very same government to fix it. If you want to stop the use of HFCS don’t demand the government tax it, demand the government remove taxes and quotes on imported sugar and eliminate corn subsidies. Once those two things are done the price of corn will increase and the price of sugar will decrease making the use of natural sugar more attractive.

Obama Came to Cannon Falls

So Obama came to the small Minnesota town of Cannon Falls a couple of days ago on his Tour of Economic Destruction. I would have reported on it earlier but there were far more important and interesting things to write about such as my distaste for new trends in the first person shooter genre of games. Either way he came, he saw, and he accomplished nothing (his tour is turning into his presidency already). The Red Star has a small piece on the President’s visit and one of the shittiest live blogs I’ve ever seen about anything (if anybody from the Red Star is reading this please hire some people at Engadget to consult you on doing proper live blogs in the future).

As this is the Red Star the article and live blog both tout the President as the man who will deliver us from evil and vanquish all that may harm us. In reality Obama is a moron who, like almost every other politician out there, doesn’t have a clue on how to actually fix the economy. Instead of discussing the economy (which is the supposed purpose of this tour) and how he’s going to “fix” it the President’s visit seems to be nothing more than the beginning of his taxpayer funded campaign for the next presidential race. One of my favorite quotes from the article was the following:

Responding to a question about the legal challenges to his health care reform bill, Obama noted that former Massachusetts Gov. Mitt Romney “instituted the exact same” individual mandate in Massachusetts.

“This used to be a Republican idea by the way, this whole idea of the individual mandate,” Obama said. “And suddenly it’s like they got amnesia. ‘Oh this is terrible. This is going to take away freedom for Americans all over the world, all over the country.'”

OK Obama I get it, you get your rocks off but forcing people to do your bidding. Because this masturbatory pleasure ends when people start calling you on your tyrannical activities you feel the need to justify why you did what you did so the serfs will shut up. But claiming that something was a Republican ideal isn’t a valid justification for anything. On top of that most Republicans wouldn’t consider Romney one of them in any real sense thus saying, “But Romney did it so that means the Republicans support it!” is stupid and meaningless. Further demonstrating his tyrannical tendencies Obama had this to say:

Noting that it was “not election season yet,” Obama said he had to mention a recent Republican presidential debate in which candidates said they would not take a deal that offered $10 in spending cuts for every $1 in revenue increases.

“Think about that,” Obama said. “I mean, that’s just not common sense.”

Although I don’t agree with the Republican’s justification for not raising taxes (their justification being that the Democrats oppose it therefore they support it) when you look at taxation for what it really is the refusal to raise taxes is common sense. Raising taxes increase the amount of money the government steals for its citizens victims (might as well call us what we really are). Increasing taxes increases the criminal activity of theft and therefore should be avoided at any and all costs. On top of that taxes aren’t revenue, so stop claiming otherwise.

Warren Buffett Should Put His Money Where His Mouth Is

I know several people who constantly claim that they would be more than happy to pay more taxes. Every time I hear somebody state this I tell them that they can write a check Bureau of Public Debt anytime they feel the amount of taxes they’re paying is too low. You know what? To this day I’ve not had one person take up the offer and thus I consider them all a bunch of hypocrites.

Warren Buffett has been receiving heavy media coverage after stating that he wants Congress to raise taxes on the wealthy (in Buffett’s case wealthy means anybody making more than $1 million). Well I’m pleased to say that I’m not the only one calling people on their hypocritical bullshit as another person has made the information available for Buffett to donate a few billion to the Treasury.

Once again if you say that you’d gladly pay higher taxes shut up and actually do it. Cut a check to the Bureau of Public Debt and send it to the following address:

Bureau of the Public Debt
Department G
P. O. Box 2188
Parkersburg, WV 26106-2188

Until you’ve actually done that shut the fuck up about raising taxes. If you have actually done that then congratulations you’re no longer a hypocrite and I’m willing to listen to your arguments.

That’s OK, We Have Enough Problems

Minnesota has a lot of problems right now including a rampant deficit that will likely only be fixed when the state files bankruptcy. Sadly Obama has decided to make matters worse by coming here:

President Obama’s economy-themed bus tour next week will start in southern Minnesota, cut across northeast Iowa, and end in western Illinois, the administration announced today.

“The president will discuss ways to grow the economy, strengthen the middle class and accelerate hiring in communities and towns across the nation and hear directly from Americans, including local families and small business owners,” the White House said in a statement.

It’s OK Obama, save the taxpayers some money and feel free to skip Minnesota on your Tour of Economic Destruction. If we want a politician to tour the country and talk about economics we’ll take one that actually understands the subject matter, send Ron Paul our way.

For All Those Who Think Cutting Government Expenditures Would Be Bad

When it comes to the debate about the debt there seems to be two camps; the people who say we must increase taxes (the people who are wrong) and those who say we must cut government expenditures (the people who are right). What’s funny about this debate is that those who claim we can’t cut the amount government is spending without killing all the puppies and kittens in the country don’t realize one crucial fact, which Ron Paul brings up:

Federal revenues for 2012 likely will amount to about $2.2 trillion, an amount roughly equal to the 2004 federal budget. To balance the 2012 budget, Congress simply needs to adopt 2004 spending levels. Was the federal government really too small just 8 years ago?

Did every puppy and kitten die in 2004? No, so clearly reducing our spending to levels found nearly six years ago won’t cause the end of this country. Think about that for a second, we can balance the country’s budget but simply returning to the same spending level we had six years ago. It’s that simple. Why are we even having this huge show on Capitol Hill when the answer is that fucking simple? Oh yeah, because the show isn’t about what will best serve the American people, it’s about political maneuvering and ensuring blame for the poor economic conditions is placed on the other party.

My Thoughts on Raising the Debt Ceiling

I don’t think I’ve talked any about the current “debate” over whether or not the government should raise the debt ceiling. The reason I haven’t talked about it is the same reason I put the word debate in quotations, I don’t view this as a debate at all but simply political theater. You know damn well that the government will raise the debt ceiling, they’re too addicted to unlimited money not to.

If you’ve been reading this site for very long it’s probably obvious that I oppose raising the debt ceiling because it would hopefully force some semblance of a balanced budget. Overall though I find it rather absurd that the government has the power to raise it’s own credit limit.

Right now our government is like an 18 year-old kid who just received a credit card. As many 18 year-old kids have no concept of managing money our hypothetical kid goes out on a giant spending spree and maxes out the card’s $1,000 limit (number arbitrarily selected). Keeping with our government is the kid analogy, through some stupid mishap in the contract the kid was allowed to raise his credit limit whenever he wants. Instead of trying to pay off the $1,000 that he owes the kid decides he’ll just raise his credit limit by another $1,000 worry about paying the money back later. He keeps doing this through the years and eventually ends up with a debt of $100,000 dollars which he has no hope of every paying back.

That’s where our government is, they have a multi-trillion dollar debt that they can’t hope to pay back so they’re not worried about it. Nobody has called us on our debt yet (and most of it his held domestically anyways) so why worry about it? But the fact of the matter is our government is insolvent and could never payback the debt if needed. I would love to see some attempt of fiscal responsibility by leaving the debt ceiling firmly where it is but I know it won’t happen, it’ll get raise now and again next year and again the year after that.

The entire “debate” is political theater with the Republicans trying to pander to the fiscally responsible and the Democrats pandering to those who want free shit. Both parties fully intend to continue giving free shit but they want to be able to point at the other party and blame them for the increasing debt/lack of free shit.

EDIT: 2011-08-01 6:07: I wrote this power last night before going to bed and this morning saw that the cronies on Capitol Hill reached a “deal” to raise the debt ceiling. I could have deleted this power as it hadn’t been published yet but I’m leaving here because I like demonstrating when I’m right; it boosts my ego.