Tag: Money Management Mishaps

And Yet They Wanted to Raise Taxes

During the government “shutdown” many people were demanding that the government increase taxes on “the rich.” Dayton thought that sounded like a swell plan because as everybody knows the smartest thing you can do during an economic depression is steal even more money from productive people. Well that idea sounds even more ridiculous now that Minnesota already ranks seventh in the list of states with the highest tax burdens:

7. Minnesota
Taxes paid by residents as pct. of income: 10.3%
Total state and local taxes collected: $45.7 billion
Pct. of total taxes paid by residents: 75.5%
Pct. of total taxes paid by non-residents: 24.5%

Less than 25% of Minnesota’s tax revenue comes from non-residents and businesses. The state only collects average, or below average, rates on alcohol and tobacco, and has one of the smallest tourism economies in the country. This means the state relies heavily on income and property taxes from residents. Minnesota has the 21st largest population in the country, but it collects the 12th most in tax revenue each year. The state and local taxes collected per capita is the seventh highest in the country, as is the tax burden as a percent of income.

By Thor in Valhalla! We’re right behind fucking California. Minnesota is only the 21st largest state yet we collect the 12th most in taxes. That’s a fucked up ratio right there. And to top it all off we can’t even keep the government running at its current capacity without either generating a giant deficit or robbing people of even more money. Who in the fuck thinks this is a sound way to run a state?

Meanwhile New Hampshire, which has no income or sales tax, ranks number seven on the list of states with lowest tax burdens. Everybody who wants to increase the tax rate of anybody in this state can kindly go sodomize themselves with a retractable baton… and not by baton either, go buy your own fucking baton (and stop trying to steal shit from other people).

That’s a Lot of Money

The ill-named Government Accountability Office (GAO) finally performed a light audit (nowhere near the type of Audit that would have went down had Ron Paul’s plan been followed), the results of which can be found in this handy document [PDF]. It’s an incredibly long document and I’d be lying if I said I’ve read through it (I’m working on it though).

There is a pretty decent summary of the report here:

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government’s first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office’s (GAO) analysis shows.

I a span of less than three yeas the Federal Reserve printed up and loaned out more money than the gross domestic product of the entire United States. What the fuck? Oh, and it shouldn’t shock you who the biggest receivers of Federal Reserve money were:

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

Yup, the Fed’s cronies all received some pretty wickedly large loans. I really have no additional comments to make, I think the presented evidence is enough for any intelligent person to figure out what’s going on.

Let me just say again, we need to end the Federal Reserve and return to a commodity-based monetary system free of all government interference.

Borders Bookstores Looking to Liquidate Their Assets

Well it seems that Borders was unable to find a sucker to buy their dying business model and are looking to start liquidating their assets as soon as Friday. I’m a man who loves bookstores but feel no sympathy for Borders and really could care less that they’re going away. Borders is a classic example of a company that has failed to evolve with the changing times and thus it’s time for them to go away (unless the government gives them a bailout or some such nonsense).

In the era of e-readers less people are buying physical books because it’s inconvenient. In order to get a physical book you must either go to the book store or order it online, have a place to store it, move it around when you’re cleaning or moving, etc. With an e-book you simply tell your software to purchase and download the book and you’re reading it in less than a minute in most cases. An additional advantage is the fact that you can take your entire e-book library with you wherever you go whereas you’re limited to the number of physical books you can take due to their size and weight. The bottom line is e-books have a lot of advantages whereas physical books have few (they can still sit on your shelf so when your friends see them you can feel all superior because you read “better books.”).

Barnes and Nobel was smart and jumped onto the e-reader bandwagon pretty early. Their first and second entry into the e-reader market were not to my liking but the new Nook is an amazing piece of hardware. In addition to jumping on the e-reader bandwagon Barnes and Nobel was also smart by trying to add value to their stories in the form of coffee shops and free wireless Internet access. Although I wouldn’t say Barnes and Nobel stores are out of the woods I do believe they’re on the right track to maintaining relevance in the age of advancing technology.

Borders was fucked the second they decided to ignore the e-book market. They signed their own death warrant in the form of trying to maintain a dying business model even after it was apparent that they were facing bankruptcy. On top of that I don’t remember ever walking into a Borders and actually finding a book I was looking for. Barnes and Nobel stores usually have pretty nice science fiction and history sections whereas the I find the same sections at Borders to leave me wanting. I’d just pass this off as me having esoteric tastes but I hear the same arguments from many people I talk to who are into completely different genres.

Much like buggy whip manufactures of days gone past the days of general bookstores is going away. There is still a market for niche bookstores that maintain titles that aren’t easily found elsewhere but it’s a niche. Now the book market belongs to e-readers and online retailers. When people want to order a physical book they usually do it online nowadays because it generally saves a butt load of money (I almost always find the price for a physical book on Amazon is noticeably less than at Barnes and Noble).

So long Borders. Part of me wishes to mourn the loss of a bookstore but you never really served a need in my life. Should Barnes and Noble go away I’ll mourn as their stores have provided me with many titles but Borders never had what I wanted so there isn’t even sentimental loss in their departure from the market.

Maybe It’s Time to Look at Spending Cuts

“Tax the rich!” That’s a quote you often hear from people who want the government to provide them everything and also lack a basic understanding of liberty and economics. Every time there is a government deficit in this country the statists scream that we need to tax the rich. Of course they never define nor justify their definition of rich so one is usually lead to believe it means anybody who makes $1.00 more than the screaming statist.

For others the definition of rich is $250,000.00 a year which I never really understood because somebody making that money certainly isn’t rich by my definition (no fancy boat, no private jet, no mansion on beach front property, etc.). Here’s the problem, even if we enact a 100% income tax on everybody making $250,000.00 or more a year it won’t clear up the federal government’s huge deficit:

This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It’s not even yacht and Lear jet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there’s a problem because there are 224 more days left in the year.

Now somebody with a lack of economic sense would come out and say we should tax the corporations (on top of the “rich”). Guess what? It won’t work either:

How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners. Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.

Taxing the “rich” isn’t going to get us out of the mess our government has created. The only option we have is to reduce our spending and that will require politically inconvenient cuts such as military, Medicare, Medicade, and Social Security. We certainly can’t afford to implement Obama’s Health Insurance Company Enrichment Act so that will have to be tossed out as well.

We literally have no other options available to us. We can’t fix this problem with taxation which leads us to look elsewhere and the only other place to look is spending. The United States government is like an idiot teenage kid (as opposed to an intelligent one) who gets his first credit card and don’t realize that money put onto that card will have to be paid back. Eventually they get in over their heads and apply for another credit card to continue their insane spending habits instead of looking at the real problem, their spending, and correcting it.

I Like This Idea, It Should Be Expanded

Although I’ve heard little talk about it I’ve found an interesting bill that I believe promotes a good idea. The H.R. 2411, The Reduce America’s Debt Now Act of 2011, would put a new entry on W-4 forms that would allow employees to voluntarily deduct portions of their paycheck to pay off the national debt.

What I like about this act is the fact it’s voluntary. In fact I like this idea so much I think it should be expanded to the point where all taxation is made voluntary. Do you think the government is doing a good jobs at spending your hard-earned money? Great, you can fork over money to them in order to continue receiving their services. Do you believe the government has done a horrible job at spending your hard-earned money? Great, you can take your money and buy services from a private provider.

I also hope this bill passes because I have an ulterior motive. I’ve mentioned that my circle of friends includes people who always say they would happily pay more taxes. When I point them to the address they can send their checks to I never hear them talk about all the money they voluntarily sent the government. Putting this on the W-4 form would make it easier for my friends to be hypocrites and to me that’s funny.

Larry Correia Brings On The Funny

I really love Larry Correnia’s blog because he has a way with words. It’s almost as though he is an author of some really awesome books or something. Obama warned that New York Times bestselling authors (who he implied are as rich as hedge fund managers) aren’t off the hook when it comes to paying their taxes. Larry finally spills the beans:

Now you know the truth. A secret cabal of bestselling writers has been sabotaging the US economy all this time. Sure, you may have thought that our situation was caused by stuff like out of control government spending, or onerous regulations, or our complete lack of coherent energy policy, or the devaluation of the dollar, or people/companies living beyond their means and then expecting the tax payers to bail them out, or entitlements that are mathematically impossible to pay, or employers being afraid to hire because of fear of ObamaCare and coming taxes, or the quadrupling of our debt over the last couple of years, but NO. That would be silly!

It has been because of us bestselling authors all along.

My favorite quote from his post though is this one:

Michael Crichton was presiding (he’s not really dead, he just didn’t want to fill out his 1040ES for that quarter’s royalties).

So there is hope for a third Jurassic Park! My day has been made and all is good in the world again.

Another Person Advocating We Punish the Successful

There are always people out there who demand that we steal money from “the rich” and redistribute it to “the poor.” To many of these people “rich” simply means anybody making more than themselves and “poor” means themselves. What these people generally are is angry and jealous that somebody has been more successful in life than themselves. Don’t get me wrong, I recognize the difference between legitimate wealth and illegitimate wealth. If you’ve obtained your wealth through coercion or using the government’s monopoly on initiating force either rub out any competition or force people to buy your product then you should be forced to refund every dollar and face civil suits for their use of violence to rob innocent people.

Alas, most people don’t stop to make that distinction which leads to be read letters like this and shake my head:

At a time when the middle and working classes find it harder and harder to even tread water, while their bosses are becoming wealthier and wealthier by comparison, I found the July 8 article “Top earners cool to paying more” deeply depressing.

When through the benefits of their wealth those who hold the power and make the rules become more and more divorced from the struggles of those who depend on them, that’s a dangerous road for our country.

From both pragmatic and moral standpoints, the wealth needs to be shared. If businesses won’t do that through truly livable wages, then it should at least happen through taxing supersized salaries.

Greed has always been around, but it’s taken awhile for it to be cultivated into the open as a positive value. So now you have people who won’t be content with a half-million-dollar job at home when they can move elsewhere to take the same job but pay lower taxes.

Ouch! Part of political and business leadership is to continually cultivate a vision for community, shared responsibility and the sort of compassionate society in which we all thrive best.

JOEL WARNE, PLYMOUTH

Notice how this guy brings up “truly livable wage” without defining it? What exactly is a “truly livable wage?” The government already mandates that employers must pay employees a “living wage” (what we usually call minimum wage). Is that not enough? Why not? What is enough? People who throw around these terms without realizing how meaningless they are truly annoy me. What do I mean by truly annoy? Well when I read or talk to these people it increases my rage levels and decreases my intelligence.

Here’s the other thing I don’t get, the author is claiming that taxation should be used if employers aren’t willing to pay a “truly livable wage.” Increasing the amount of money the government forcefully steals from an arbitrary number of people (depending on who is defined as rich) doesn’t help those working for a living, it harms them.

Most people that are defined as “rich” by those advocating higher taxes on said “rich” are employers. By definition an employer is somebody who exchanges their money for the labor of others. When you take more money from employers it gives them less to pay to current employees and hire new employees. Not only that but it also increases the chances that these employers will simply throw up their hands in frustration and move to a friendlier state.

Punishing those who have been successful in life also sets a poor precedence. What motivation is there to succeed if that success will only be met by the government stealing more and more of your money?

Finally tax dollars have no guarantee that they’ll reach “the poor.” Government is great at mindlessly tossing money at stupid things. Look at the state budget and then look at the percentage of money that goes to “help the poor.” Hell 7% of Minnesota’s expenditures go to paying former state employees pensions. Then there is that nice 20% chunk that simply goes to a category labeled “remainder.” Increasing the amount of money the state confiscates from an arbitrary number of people isn’t guaranteed to reach people advocates intent it to reach.

If you want to help the working class then demand that government remove itself from economic issues entirely. Let’s rid ourselves of government regulations that exist to push competitors to their favored companies (those who can make the most campaign contributions) out of the market. We should strive to make every industry like the personal electronics industry which is free of many government regulations, producing products people want, and most of all successful. Allow people to be successful and stop punishing them for it.

Fixing the American Economy by Firing the MBAs

I ran across an interesting article that talked about the fact that America no longer produces innovative products because everything is run by MBAs:

Bob Lutz, the former Vice Chairman of General Motors, is the most famous also-ran in the auto business. In the course of his 47-year rampage through the industry, he’s been within swiping range of the brass ring at Ford, BMW, Chrysler and, most recently, GM, but he’s never landed the top gig. It’s because he “made the cars too well,” he says. It might also have something to do with the fact that Maximum Bob, who could double as a character on Mad Men, is less an éminence grise than a pithy self-promoter who has a tendency to go off corporate message. That said, his new book, Car Guys vs. Bean Counters: The Battle for the Soul of American Business, has a message worth hearing. To get the U.S. economy growing again, Lutz says, we need to fire the M.B.A.s and let engineers run the show.

Although this solution won’t fix all of the problems facing American’s economy I believe it would do a great deal to fix our lack of quality American products. Let’s face it, America doesn’t actually create many innovative products anymore. One of the few exceptions to this rule is in the personal electronics and software industries where things are almost always run by engineers. While our phones become more powerful with each passing month our vehicles remain almost the same as they were in the 60’s with only a few refinements to the technologies.

Research and development is a joke because it’s usually seen as too expensive by the bean counters. Why should a company produce an innovative product when such things costs money, it’s far easier to just create a rehash of last year’s model with a new model number slapped on the package and tout the relatively few improvements as major innovations? I think the article has a point, this attitude has lead to a stagnant market where MBAs are now in charge and engineers are relegated to the back rooms (if they’re allowed to continue working at all).

The article also states a side-effect of this system of production, good people are fired so that companies can make the short-term numbers each quarter:

In the U.S., the growth of the financial industry has only exacerbated the trend toward balance-sheet-driven management. Companies everywhere, but particularly in the U.S., where the banking sector wields the most power, are under tremendous short-term pressure to make their quarterly numbers. This often leads to planning that’s reactive rather than smart: force the highest-paid engineers to retire, even if they are the best, and reduce payroll costs across all divisions rather than invest in the ones that are pushing the New New Thing through the pipeline.

Engineers who are good at their jobs want to get paid according to their skills. This does become a problem for the bean counters because they believe it’s far more productive to hire two cheaper engineers than a single expensive one. It never crosses their mind that the one expensive engineer can produce far better products than the two cheap ones though.

Again, I realize that the problems with the United States economy run deeper than a bunch of MBAs. But I also believe America could start churning out innovative products again if the MBAs were tossed out on their asses and quality engineers were allowed to do their thing.

Alas, MBAs are too deeply rooted in the corporate culture and I fear we’ll never rid ourselves of this yoke made by bean counters.

United States Job “Creation” Stalled Last Month

It seems all of that stimulus money has done a great job of… doing nothing while costing a fortune. In the month of June only 18,000 jobs were “created” which was below the estimated 90,000. Oh, unemployment increased a bit to boot, no surprise there:

Only 18,000 new jobs were created in the month, way below expectations of a 90,000 rise, which had been raised by strong private sector hiring figures released on Thursday.

The unemployment rate also rose, to 9.2% from 9.1% a month earlier.

Data for April and May was also revised down by a total of 44,000 jobs.

The poor result was driven by continuing layoffs by the public sector – where 39,000 jobs were lost – and a much weaker-than-expected 57,000 jobs created in the private sector.

First of all the term jobs created is a complete fallacy when those jobs are products of government interference in the market. Any idiot can tell you that jobs are not created by dumping money into a few favored industries but by employers who are doing well and need an increased labor force. When times are good people do business and that business creates a need for more laborers whom are then hired by employers.

The government seems to believe that simply throwing money into the banking system will somehow magically lead to increased business and thus more employment. That doesn’t work of course because employers are not likely to take loans to increase the number of employees if they have no need for more employees. The government is also doing its damnedest to prop up failing businesses in the hopes of keeping people employed at those businesses, well, employed. This doesn’t work though because people aren’t buying goods from those businesses which is what lead to their failure. You can dump as much money into a failing business as you want but it won’t make consumers want their products.

If the government wants to help the economy recover they’ll stop interfering. Of course that being the logical solution the government is likely to take a different route entirely:

The weak data has raised expectations that the US Federal Reserve may ultimately have to adopt a third programme of “quantitative easing” – buying up debts in order to pump cash into the economy – just as its second such programme has come to an end.

Ah yes, the classic government solution of, “If it doesn’t work just try again, only harder!”

Cash a Check, Go to Jail

Some people are assholes but usually just being an asshole isn’t that big of a deal. When being an asshole at work leads to an innocent man sitting in jail for an entire weekend then you need to be fired. That’s what happened to Mr. Njoku when he tried to cash a valid cashier’s check issued by his former bank:

Njoku signed up to have the rebate deposited directly into his Chase Bank account. But when the IRS rebate arrived, there was a problem. Chase had closed Njoku’s account because of overdrawn checks in the past. The bank deducted $600 to cover what he owed them and mailed him a cashier’s check for the difference–$8,463.21.

But when Njoku showed up at the Chase branch near his house intending to cash the check, he was in for a nasty surprise.

The check had Njoku’s name and address on it and was issued by JP Morgan Chase. But the Chase Customer Banker who handles large checks at the Auburn branch was immediately suspicious.

“I was embarrassed,” Njoku said. “She asked me what I did for a living. Asked me where I got the check from, looked me up and down—like ‘you just bought a house in Auburn, really?’ She didn’t believe that,” he said.

Here’s the thing, if a person comes into your bank with a cashier’s check issued by your bank it should be trivial to punch up records involving that check on your computer. I’m sure doing so would take all of five minutes. Instead the employee decided the check was fraudulent and called the police:

But when Njoku arrived, it wasn’t the money that was waiting for him.

“They just threw me in jail; they called the police and said this guy has a fraudulent check,” Njoku said.

Auburn police arrested him for forgery – a felony crime.

“I was like – you’re making a mistake, you’re making a mistake, don’t take me to jail, I got work tomorrow. I can’t afford to miss work,” he said.

Njoku was taken to jail on June 24, 2010, which was a Thursday. The next day, Chase Special Investigations, realized it was a mistake. The check was legitimate. The Investigator called Auburn Police and left a message with the detective handling the case, but it was her day off. So Njoku stayed in jail for the entire weekend. Finally, on Monday, he was released.

An innocent man spent an entire weekend in jail because some employee decided that man’s check was fraudulent. It would have taken all of five minutes to determine the legitimacy of the check and cashed it. But the worst part is the bank made nothing more than a half-assed attempt to inform the police of their huge fuck up. But this isn’t even the end of the story as Mr. Njoke also lost his car over the ordeal:

Njoku’s car had been towed from the bank parking lot and his check seized as evidence.

“I had to wait a couple of weeks,” he said, “and my car got sold, auctioned off.”

Njoku says he didn’t have the money to pay the impound fees and fines to get his car back before it was sold. He said he also lost his job because he didn’t show up for work while he was in jail.

So because of one asshole working at the bank an innocent man spent a weekend in jail, lost his job, and had his car stolen from him by the state. I’d say Mr. Njoku certainly has valid grounds for a lawsuit against the Bank being the cost him so much. Likely though the banksters will get away scott-free and the employee will keep her job. These are the types of situations that people can get into simply because of another person’s laziness.