Idiotprogrammer Blog

Category: Business

  • Lots can change in a single weekend

    I was furious that the Senate stimulus bill was weakened by Republicans who cut funding on education, science research, arts funding and all these worthy things that would be especially worthy in such times.

    I was furious and I emailed my Senator and emailed my friends with my rage. But a funny thing happened. I looked around the blogosphere and find that everybody is outraged as well. (See this snl skit which pretty much summarizes it). See also Rachel Maddow:

    "Cutting food-stamp funding to attract Republican support is proof-positive that the Republicans are not trying to come up with an effective stimulus here. If your house is on fire, and you call your fire department, and your fire department tells you to pour gasoline on the flames, they’re not actually making a good-faith effort to help you put out the fire. They’re not a good fire department.

    "If you’re working up policy to fix an economic crisis, which is characterized by there being no spending in the economy, and someone in that debate says, ‘OK, but cut the spending out of the rescue plan,’ they’re bad at making policy.

    "And you know what? It matters when you’re wrong. A whopping proportion of the Republican rhetoric about stimulus is wrong…. It’s just wrong. The time is now to take the radical step, as Americans — as civic-minded Americans concerned about our future — it’s time to take the radical step of privileging correct information over incorrect information….

    "If you are wrong, from here on out, you should lose the argument and you should lose your political potency. Form a flat-earthers club or something, where you talk enthusiastically to each other about your made-up economic ideas that aren’t based in reality. But get out of the way of the people who are actually trying to save the country."

    This so-called compromise will not stand, I guarantee it.

    While we are talking about a new groupthink emerging, now is probably the time to add some conservative/libertarian bloggers to the regular visits. Arnold Kling’s Econoblog has always been a reliable read about the New Economy (he’s teamed up with two other economists I don’t know, but are probably good).  Here’s his piece on the question of why don’t we yet have 1 universal remote control?

    Cafe Hayek has always been a reliable libertarian blog run by Don Boudreuax. I’ve stopped reading it. Here’s a good deconstruction of that misleading graphic released by nancy Pelosi’s office.

    Tyler Cowen’s Marginal Revolution is also a good read, though for some reason I never got into it. Two reasons. First, it’s more a links blog than an analysis blog (in general terms, I mean). Second (and I’m almost embarrassed to admit it), I don’t like the wide text in the web design. It’s embarrassing because my own blog suffers from exactly the same problem.  I really need to make this looking nicer, with the recession and all.

    Actually though, Yglesias already covers Tyler Cowen pretty well, and some of the techie blogs cite Arnold Kling here and there.

    A few years ago I changed dentists. From my teenage years I saw Craig Leever, and by some strange luck, he continued to be my dentist until about 2003 (that’s almost 20 years!). Craig was a great dentist and just a kind man and father, but it was really inconvenient to see him in the old neighborhood, so I changed to a dentist to a place near my work. The new dentist was different—in some ways better. But her approach to dentistry was radically different. Leever was  aggressive about treatment (with my pocketbook definitely feeling the effects) while Dr. Kan was more of a wait-and-see kind of dentist. Leever had warned me about some major dental work I needed to be done; when the other dentist saw it, she said, no, it’s not urgent (although she understand where Leever was coming from). I realized that sometimes change is good for its own sake sometimes. Why did I automatically think Leever’s approach to dentistry was automatically better? Honestly, I had no idea. (Both dentists were in fact highly skilled). It’s a good idea to change providers  on a regular basis—if only not to become too beholden to a single method of providing health care.  If you go to the same barber shop all your life, chances are that your haircuts will start to be old-fashioned..and even laughable.

    The same is true for reading sources. We rely on journalists and news sources, but every so often we need to realign—if only for a change of scenery.  Several times I have bemoaned how America-centric my blogosphere seems to be. Ok, for programming topics I find blogs in South America and Europe, but for cultural stuff, I almost never venture beyond our borders. (Reading James Fallows is as adventurous as I get).

    Postscript: After leaving to another dentist, I learned through a friend-of-a-friend that Craig Leever died unexpectedly. He was in his 50s and seemed relatively healthy when I saw him. I used to see him at the neighborhood swimming pool with his boys. The passing of a dentist is not supposed to mean much in this world, but a part of me knew that the world had lost someone special.  I’m sure if I do this blog long enough (and there’s no sign I’ll be stopping—although maybe the Chinese php hacker who is trying to take over my webserver will probably terminate my blogging at some point—leaving remnants on the wayback machine). But I’ll probably have several more death posts to write; is it too soon to create a category for it? 

  • Why the Economic Stimulus (and Recession) is all About

    Here are three things you need to read.

    Martin Fackler on the lessons that the Japanese recession (and its own economic stimulus package)  should teach the US.  An amazing piece of journalism.

    Second, Robert Reich provides his daily commentary about the effectiveness of various stimulating proposals. Look at this chart:

    image

    (The main flaw of this data is not stating the effects of cancelling the tax cuts; that seems to be what Obama in suggesting for upper income populations (at least in a few years).

    Finally, take a look at one of this Phillip Longman piece on how improving the national train system would pay handsome dividends. (I linked to this a while back).

    Here’s an email I sent to Sen Cornyn and Sen Hutchinson:

    Howdy, I’m calling to let you know my opinion about two very important issues:

    1)I oppose the $15,000 tax break for new homeowners. I’ve read several papers online about how it would simply increase the price of houses without delivering any real benefit. it also raises issues of fairness. I rent and have been renting all my life–I never get to use these tax breaks. (The mortgage deduction is another deduction I’ve never been able to use either).

    2) I oppose the Nelson-Collins attempt to cut public spending on arts funding, climate change research, homeland security, Amtrak, NSF. These are all worthy causes which would probably only be funded by public organizations. It is unfortunate that your Senate has chosen to spend a king’s share of money on banks in TARP when it appears to have  done little good.

    As a general observation, you need to forget about financial capitol and start focusing on human capitol.

    Thank you.

     

    Comment from Shanikka,  about a NYT article on the recession rate:

    I wish the lies out the Labor Department each month would just STOP. Honestly. Hopefully President Obama will see clear to have this agency go back to the truth instead of the spin we’ve been fed for the past 25 years where the unemployment rate is concerned.
    7.6% unemployment? We WISH. The real unemployment rate — the one that counts all those people who are unemployed and underemployed under the government’s narrow definitions of both (thank Reagan for first decreeing this funny math to be the rule for labor department statistics, much like he declared ketchup a vegetable), and puts back all those folks who were screened out simply by Reagan’s folks re-defining what "unemployment" is. Puts back all those who are disgusted and simply have given up looking after futile searches for work that they undertook in good faith not just once, but perennially.
    When you use Real Math instead of Funny Math, the government’s own data this month (contained in Labor Department Table A-12 – innocuously labeled as "Alternate Measures of Unemployment") puts the current TRUE unemployment rate at 13.9%. Almost DOUBLE the 7.6% Funny Math rate.
    A rate which, while increasingly alarming, nonetheless which continues to lull the general population into a sense that all is still OK. Because, after all, it’s only those that don’t want to work anyway who are suffering: the "lazy", the "unqualified", the haughty who think certain work is too good for them — and the outliers, especially Black men (who have been suffering double to triple the announced unemployment rate for decades) (yes, that’s brutally angry sarcasm from this Black woman) that don’t have a job.
    And yet our still telling ourselves that if we just "retrain" everyone or get them into "green jobs" it will all be fine. We will again be able to "compete" with the folks overseas who are benefitting from our own corporate greed and making bank as fewer and fewer folks, even with college educations, can make ends make.
    13.9% unemployment, folks. In America. Why are we not outraged at those whose greed and malfeasance, within and outside of government, continue to bring our economy and our people’s ability to care for themselves to its knees?
    Why?

    Notable number from the original article:

    In addition, the government revised the estimates for previous months to include another 400,000 job losses. For December, the government revised the job loss to 577,000 compared with an initial reading of 524,000. Over all, it said, the nation has lost 3.6 million jobs since it slipped into a recession in December 2007.

    This backward revision is important because initial surveys almost always get the numbers wrong. First, it shows how deep the recession has been so far. When you are unemployed, the last thing you want to hear is that more people are competing for the same jobs that you are. When I was “profoundly unemployed” in 2002, I discovered that I just couldn’t compete even for lowly jobs as a result of unemployment. My enhanced job skills seemed practically worthless. Also, I noticed that you can no longer talk your way into jobs into jobs you were on the borderline of being qualified for. It meant fewer full time jobs and more contract jobs; in my field of technical writing, it meant emphasizing expertise on tools rather than ability to organize and write. Finally, I noticed that job networking rarely helped you because everyone was in the same boat. My solution was to move in with parents, accept a job with limited opportunity for growth and stay longer than I needed to. (It also meant going into more debt).  On the other hand, I see a new area for job growth: education.

  • Why Homebuyer Tax Break is a Bad Deal

    I frankly am appalled to hear that the Senate voted a $15,000 tax break for homebuyers (according to this article by David Herszenhorn). As usual the commenters have the most insight. See this amazing comment and this one.  It’s awful legislation (it cuts funding for the Arts, climate change research, etc) and it panders to a specialized group of people who don’t particularly need the help. But it’s hardly surprising that this is the brainchild of politicians used to listening to corporate lobbyists than ordinary people.

  • We have a shortage of news analysts who are not millionaires

    Sunday I happened to turn on a Sunday talk show, something I tend not to do anymore. The show was Meet the Press.  The topic of the roundtable was the banking crisis. (Read the transcript).  It was one of those uninspired discussions mired in abstractions and financial cliches (“tax cuts” “need to cut spending” “need to preserve the banking system” etc) .  These were educated and knowledgeable people, and yet they didn’t seem to grasp that the American government has crossed a dangerous line by bailing out banks. They seemed unable to criticize the financial sector for its excesses and unable to differentiate between what industry people were saying and what the American people were saying. Their solutions were basically that the American people needed to suck it up, that we should avoid public spending on infrastructure, that we should avoid regulation of business and let the economy grow of its own accord.

    Here’s typical blather:

    MR. GREGORY:  All right.  I, I, I want to talk more broadly about the, the banks in this country, what’s happening to them and what the government should do about it.  Now, here’s a chart that struck us.  This is the market value of some of the biggest U.S. banks.  The big circle here is back in 2007, the little circle is here in January of 2009.  And look at that, Citigroup in 2007 had a market value of $254 billion, now $19 billion.  J.P.Morgan, $166 billion, now $94 billion.  Wells Fargo, $118 billion, now $68 billion.

    Erin Burnett, why hasn’t the administration been able to do a better job explaining how severe this crisis is to the American taxpayer?

    MS. BURNETT:  That is, that is the ultimate question here.  It is amazing, when you listen to so much of the commentary out there, that it focuses on bonuses or private jet use or, or also just that they’re not lending.  None of these things, really, are, are the real issue here.  And it has been very poor public relations on behalf of the Treasury under Paulson, and even now so far under the Obama administration, to explain to the American people how you cannot have an economy that grows without a healthy banking system.  Japan is the perfect example of that.  They spent their way from a–the, the ratio of 68 percent to 128 percent, they got nothing, because the banks never got rid of those bad loans.  And if banks don’t get rid of bad loans, they don’t lend. And that means new businesses don’t start, people can’t buy homes, they can’t buy cars.  It, it makes sense to people.  And that’s, that’s why you must deal with the banks.

    MR. GREGORY:  Right.

    MS. BURNETT:  That, that, that–it isn’t choosing Main Street vs.  Wall Street.  That is a completely false choice that is being put out there.

    Here is why they are wrong:

    1. The previous Administration has already spent trillions of dollars on defense and subsidies to help various industries (mortgage deduction, etc).
    2. TARP 1 basically didn’t have the desired effect (and TARP 2 probably won’t either).  TARP 1 was recommended by almost every financial commentator on these shows, and may well have been a waste of taxpayer money.
    3. The Citigroup bailout especially didn’t have the desired effect and was unduly generous for business.  A commenter summarized a PBS exchange:

      In fact, The NewsHour With Jim Lehrer had several people in its interview or panel segments who said Treasury cut a bad deal. On both the NewsHour and, later, on Countdown, several guests pointed out that the size of the CitiCorp handout was more than the capitalized value of the entire company.

      Jeffrey Brown asked the guest (whose name escapes me), "So if a private citizen came along with this much money, they could have bought the entire business?"

      "Yes," came the reply, "and instead Paulson only got (the government) a 7% stake."

    4. Domestic spending on infrastructure, education and green technology has been woefully inadequate. Public investment may not be “efficient” in the economic sense of the word, but at least its benefits are distributed, far-reaching and useful generally.
    5. The U.S. has been unable to effect systemic change on the health care system or entitlements.

    Ok, I’m not an economist, but I think these 5 points are beyond debate. These sorts of points are crucial and things which bloggers and economists make all the time, and yet major media talk shows barely mention these things. In the Meet the Press show I alluded to, the guests on the panel consisted of the head of Moody’s (the discredited credit rating agency), a former VP of Citigroup and a son of a multimillionaire. These were actually informed people, but their viewpoints were skewed  to the bias of the industry they came from. What we needed was balance, a liberal viewpoint, someone who can see the banking system more objectively. In fact, the only liberal viewpoint on the show was John Kerry….who himself was married to a multibillionaire!  Kerry has a deep commitment to the public good, but he looks at things from a billionaire’s point of view. Can he help it?

    These national news-and-talk shows receive lots of advertising from financial firms. Saying bad things about this industry could cause advertisers to disappear. This is not entirely a bad thing. Why, for example, couldn’t we have set conditions on banks accepting TARP money that they not use any money for advertisements on TV for the next two or three years? The solution, I’m afraid, is for people to stop relying on the major networks for news. These shows are good for reporting and investigations…not so much for commentary. But it goes deeper than that. Mere reporting is limited to certain subjects. Scandals are ok, but labor unions or minimum wage or deaths in Gaza or peace demonstrations just never seek to qualify as important (the same Meet the Press show had a 10 minute segment about the upcoming Super Bowl, from which NBC hoped to derive significant benefit).

    I consider progressive bloggers  reliable sources of information. (Do I consider myself a progressive blogger? No, I consider myself as someone with progressive views who occasionally blogs about these matters). Would these people make good talk show guests? Maybe, maybe not. That’s partly why I enjoy the old fogey show MacLaughlin Group. Sure, they are blowhards and too concerned with inside-the-beltway politics. They have one conservative guest who I find odious. But at least these people reflect individual opinions and have reasonable contact with the common man. Also, they are not millionaires. But their opinions interest me more than those on the Meet the Press panel. The problem is that Meet the Press called together financial experts to talk about politics. If they were called upon to discuss the best place to put investments or what the economic forecast for the next year will be or what caused the financial meltdown, I would trust their opinions.  Instead they are being asked to comment on public spending questions—matters upon which they have no credibility. I would much rather hear commentary by a group of religious leaders than a bunch of banking experts. What about academics (those fools  locked up in their Ivory Tower)? Robert Reich for example, is an economics professor, and so is Paul Krugman. Both are notable liberals well-versed in economics. They speak the same language as journalists and industry people. Reich  speaks forcefully on labor issues.

    The ideal panel would have 1 journalist, 1 politician,  1 academic type, 1 industry leader and 1 inside-the-beltway political commentator.  These shows often have a false diversity. In the first segment of Meet the Press, the invited guests were John Kerry and Kay Bailey Hutchinson. Why does anyone think that two senators with opposed positions can provide significant insight about anything? Senators (with the exception of maybe Moynihan or Phil Gramm or Paul Simon) are just processors of information. They try to be mainstream politicians; they rarely have original opinions (although occasionally they have original rhetoric). 

    Instead of these point-counterpoint panels, what we need is a group of guests consisting of one person per interest group.  Sure, the environmentalist and the energy executives are always going to disagree about global warming, so they can seem to neutralize one another. But if you added a technologist, a religious leader and a blogger, we could have interesting discussions.

    I do not oppose a group of experts coming together to have a focused discussion about a single issue.   But too often the most interesting thing about these TV talk shows is not what was said but who is not participating in the discussion.

  • Secrets to Houston Supermarkets

    KPRC Reporter Amy Davis has a great report comparing the price-cutting strategy of Houston supermarkets.

    I added this comment:

    I want to mention a crucial and overlooked fact about these supermarkets. Look at your receipts seconds after your purchase! Frequently supermarkets will have old tags underneath an item and forget to  remove the label when the sale/promotion is over.  Customers assume they are getting the 12 pack of Coca Cola for 2.99 (which ended 2 weeks ago)  but don’t see on the receipt that the price is in the computer for $4.19.

    I once had this happen at Walmart (which is the worst about correcting prices).  For three consecutive weeks I noticed they had incorrect prices for a 12 pack of Coke and I told the manager every time. But nothing was ever changed.

    It’s worth remembering that supermarkets are now changing their policy about returns. Formerly, service managers used to handle voids/returns/exchanges. Nowadays, the courtesy booth is handling these things, causing you to have to wait in line. That means, if the courtesy booth is closed (which is customary after 8:00 PM), you won’t be able to make a return.

    Finally, I’ve noticed that HEB has a policy where they won’t do refunds/exchanges for defective merchandise unless you have a receipt. Formerly stores used to do this on a case-by-case basis,  but now supermarkets are sticking to this rule more strictly. The notable exception is Walmart, which has one of the most liberal return policies out there.