Gas Tax Holiday?

Sounds like a bad idea to me.  I’m not a big fan of pandering, and this really smacks of Clinton and McCain attempting to buy our votes with money the government doesn’t have.

People say they want the government to be run like a business, but since businesses exist soley to make money (except for non-profits, and even then…) I think that is not the goal we want of our government.  A government should be run like a household.  It should make money in order to provide for the needs of those living under its roof.

Where am I going with this?  Well, say you’re the head of a household.  Your financial situation isn’t looking so good, and it looks like your wife and kids may be losing their jobs.  So, what do you do?  Bringing in less money does not sound like a good idea to me.  Convincing your family’s jobs to give them more money sounds like a better idea to me.

To stop the analogy, real wages have not increased in quite awhile, and I think the economy is starting to feel the effects.  People say that raising the minimum wage hurts businesses by forcing them to spend more of their money on their employees.  However, most of the companies that pay minimum wage are companies that people spend a lot of money at:  retail stores, grocery stores, dry cleaners, etc.  So, giving people more money to spend actually will give those companies a boost.

So, again, I think that companies need to bail out the economy, not the government.

How To Flame Out At Work

A month or so ago, the Amirah saga wrapped up.  If you remember my last post about her, I had to explain to her that white people don’t use hair oil.  A little after that, Amirah’s attendence got worse, and we had to write her up.  Even though I was not involved with that at all, she still chose to blame me.  Apparently Hell hath no fury like Amirah scorned.  She called me a devil person and told me that one day, God would make me pay.  So, now I’ve been cursed by an Ethiopian.

Things went on for awhile longer, and she was eventually fired for her attitude.

I just wonder what she would have called me if I had written her up for insulting me…

Weekend On The Town

Friday night I went to see Eddie Izzard with my wife and two of our friends.  I was a bit disappointed to see that Eddie was not in drag for the show, but he did give us the finger.  As always, his routine was topical, extemporaneous, and extremely hilarious.  It was also good to see Graham and Terry again.  It had been over a year since we saw them.

Saturday, Ritsa and I went to see Iron Man.  Fantastic movie.  It takes itself seriously enough to make sense, have three-dimensional characters and provide a little social commentary, but it had enough sarcastic comedy in it to keep from being overwrought and pretentious.  Robert Downey Jr. was inspired casting, and he acted his ass off.  Gwyneth Paltrow was not annoying and even almost pleasant to watch.  The most surprising part for me was Jeff Bridges playing a corporate leader extremely well.  He put aside The Dude and Kevin Flynn and created a memorable character in Obadiah Stane.  I was impressed.

Rent or Buy?

Recently, I was asked by a friend why we had not bought a house yet.  I am working part time to help make ends meet while I finish up school.  We still put away money for retirement, we put away money to cover any sudden large expenses we might have, and we put away money to cover expenses and lost income when we finally have a child.  Even with all that, we still put money away towards a down payment on a house.  It’s not a large amount right now, but we have a few expenses, like a car payment, that will be going away soon, so our saving rate will increase when that is over.

So, we are making more money than we spend, and we save that money.  We’re in a decent position financially.  Yet, we’re not buying a house, why is that?

Note:  These numbers are obfuscated a bit to not reveal too much information about my life.

First, let me guesstimate that the condo we live in would sell for $400,000.  Searching for a loan, I found one at 5.75% APR if we put 20% down on the $400,000 loan (which we do not have right now.)  That works out to be a $2,334 a month house payment.  That is significantly more than we pay now, like around 150% more than we pay in rent, not including condo fees which we don’t have to pay now.

But we save money on taxes because of the interest, right?  Sure we would.  The first year of the loan, we would spend ~$18,000 in interest.  That’s $7,300 more than the standard deduction for a married couple.  Since we are in the 15% tax bracket, that would save us a total of $1,095 a year in taxes.  Even if we were in the 25% tax bracket, we would save $1,825 a year.  So, I could spend ~$7,000 more a year on the place I live to save $1,825 a year in taxes.  This is also the most I’ll ever save on taxes because of the interest, too, since you pay less and less interest every year.

But what about the equity you gain?  Well, with that same loan, you pay about $4,100 on principle.  So, we would have increased our equity in the condo by that amount.  So, we’ve saved $1,825 on taxes and built up $4,100 in equity for a grand total of $5,925.  We still haven’t reached that $7,000 of extra cost yet, though.  The only way to make it up is to hope that the condo increases in value.  Over the long haul, it will go up.  However, there is no guarantee that in the next 5 or 6 years it will go up in value significantly, no matter what real estate people try to tell you.

Let’s assume the condo does go up a few percentage points in value over the course of the year.  That would put the buying ahead of renting in money terms.  However, I’ve only talked about the good parts of home ownership.  There are more costs associated with owning a house than with renting.  Renters don’t have to pay to replace appliances.  They don’t have to pay for upkeep.  All I have to do is call my landlord, and she is obligated to fix it.  Renter’s insurance is also less than homeowner’s insurance.  Oh, and I don’t have to pay property tax.  That saves me $2,900 a year right there.

Frankly, unless we move somewhere lower in cost and more inconvenient for us, there isn’t a large monetary incentive for us to buy a house.  Think about it, do people that own houses really have a lot more money lying around?  I’ve never really seen any evidence of this.  In fact, I’ve seen a few people that were house poor, and we actually had more disposable income than they did.  For now, I’m happy renting, and until we make more money, renting is at least as good of an option as buying, if not better.

Regulation Is The Mother Of Invention

Yesterday The Washington Post ran this article. Treasury Secretary Paulson is calling for more, if only temporary, regulation of investment banks.  He’s finally realized that the investment bank community has come up with a lot of other ways to invest money that flies under the regulation radar.

Does this really surprise anyone?  They came up with new ways to slide money around regulation.  They’ve had so much time to do it, over 30 years.  It happened because regulation limited their ability to make money.  So they invented new ways to make money.

People claim regulation stifles growth and innovation, however greed goes a long way towards compensating.  I think the regulation is needed, given the fact that investment banks have proven they cannot be trusted to regulate themselves.  Of course, any extra regulation that is added will cause them to come up with new ways to bypass the new regulation.  This probably isn’t a bad thing, since it will give rise to new money making opportunities for people.

Morebuntu For Me

I posted last week that I have been running Ubuntu on my desktop for the last year. Well, I’ve gotten it up and running on my laptop now. I tried it previously, but 7.04 didn’t support my video setup out of the box. 7.10, the Gutsy Gibbon, does, though. So, here I am, typing on my laptop that CAN boot to Windows XP, but I prefer to use Ubuntu.

Someome Out There Thinks I’m Gay

I had today off, so I’ll dip into my backlog of work stories.

The charity I used to work for was almost all women.  Every time one would get engaged, they would throw a surprise work shower for the lucky lady.  So, when I got engaged, I expected a surprise shower.

It would have been a surprise if my friend Kristy hadn’t accidentally spilled the beans to me by trying to hide her work calendar.

Although it wasn’t a surprise, I still enjoyed the groomal shower.  The funniest part was the cake.  My wife’s name is Gregoria.  So, when they ordered the cake, they ordered it to say, “Congratulations to Troy & Gregoria!”  However, the cake place put “Congratulations to Troy & Gregory!” on it.

I wonder if the people at the cake place were thinking the cake was for a gay couple…

Ubuntu. I buntu. We buntu.

My desktop computer has not run Windows for over a year now. It has been running one flavor or another of Ubuntu. Ubuntu is a version of Linux designed to be accessible to everyday people. Almost everything can be done using graphical tools instead of typing commands into a console. It is also comes with programs that do pretty much anything you can do with Windows right out of the box. It has an office program, a photo editing program, an email client with a calendar, a note-taking program, a web browser, a movie player, and a music player.  If you need support, often you can get in contact with the people that wrote the program or the community itself will help you.

All of this comes completely free. Free not just as in it costs no money, but it is also free as in you have the right to do pretty much anything you want with the programs. You don’t have to buy licenses from companies to use the programs or anything like that. You also don’t get monitored by whoever created the program.

Linux has other benefits, like the lack of serious viruses for it. Its security setup is to disallow anything not explicitly allowed, whereas Windows likes to allow anything not explicitly disallowed. Which do you think is safer? Ubuntu also requires you to enter your password to change anything about the system. If a program wants to install itself, you have to allow it. It can’t do it be installed behind the scenes by another program.

Overall, I’ve been very happy with Ubuntu. Click here to either download a CD image or here to have a CD shipped to you completely free.

Stupid Things On TV That Bother Me

Tonight, it’s Torchwood.  There’s a dead, ambulatory, sentient character.  He’s been walking and talking all episode.  Then, when he’s required to give CPR, he realizes he has no breath.  Um, we talk by breathing air through our vocal cords.  So, obviously he had breath to give CPR.  He’s a doctor.  He should know these things.  I know these things.

Buffy pulled this in the first season when Angel claimed he couldn’t give Buffy CPR for the same stupid reason.  When will writers learn?

My Economic Stimulus Package

So, this year the federal government is giving people up to $600 a piece to spend.  That’s crap.

You want to see some real stimulus?  Let’s look at ExxonMobil.

They posted a record profit of $40 BILLION.  That’s more money than any corporation has ever made in one year in the U.S.  What do I think they’re going to do with it?  I’m betting a stock buyback.  It’s one of the stupider moves they could make.  Their stock prices are already flying high, so they’ll be buying those shares of stock at a premium.  One of the first rules of using the stock market is to buy low and sell high.  Buying their own stock now would be buying high.

Second, all a buyback does is raise the equity of shareholders on paper.  They actually have to sell the stock in order to reap the benefits of the buyback, which would in turn lower the price of ExxonMobil stock.  So, you’re not actually giving value to your shareholders.

If ExxonMobil really wants to give back to its shareholders, it should issue a dividend.  Give the cash straight to the shareholders immediately.  Reward them directly for having faith in the company.

However, if ExxonMobil really wants to reward the people that made their record profit possible, they should give some money back to its employees.  After all, if their employees hadn’t done their jobs as well as they did, they wouldn’t have made as much money.   Here’s my recommendation:  Give each employee a $100,000 bonus.  $100,000 is a lot of money, right?  How could they possibly afford to do that?  With ExxonMobil’s 100,000 employees, that $100,000 bonus works out to $10 billion dollars, one quarter of the company’s profit.

It’s a decent chunk of their profit, but there are lots of benefits.  First, any company that gives all of its employees that size of bonus will have wonderful morale and very little turnover.  It would also generate a feeling of investment.  After all, I know I would be more likely to try to generate profits if I knew I’d be getting some of those profits.  Second, the government will suddenly have almost 100,000 people jumping up a number of tax brackets.   So the government will actually get MORE revenue.  Finally, 100,000 people suddenly getting $60k after tax withholdings will be throwing huge amounts of cash into the economy.  They could use it to pay off loans and credit cards, adding liquidity to the credit market.  They could buy large ticket items like TVs, cars, etc.  The least likely thing they’ll be willing to do is invest all of it, effectively negating the stimulating power of the bonus.

Now,  it would take more than just ExxonMobil doing this, but if every company gave 25% of their profits back to their employees, a lot more money would be flowing through the economy.  It also means the government wouldn’t have to get involved and would maybe even benefit financially.