Saturday, December 31, 2005

WOW Costco!

I just watched a story on ABC's 20/20 website about Costco. You can read the story here, or better yet, click on the video link and scroll down the list to the Costco story. There are some things almost renegade about this chain - the average worker makes $17/hour, almost 40% higher than competitor Sam's Club, the CEO is paid a petite $350,000 a year, probably putting him at the lowest rungs of CEO pays. Costco was, get this, the world's largest wine retailer this year! WOW!

It appears that their average customer is much more affluent, a median income of $74,000 a year, if I remember right. That's much higher, I suspect, than Sam's Club, where I am a member. A brief look at the Costco website seems to confirm that suspicion. So in the end, after all the praises of Costco, maybe I still need a Sam's Club to allow me to buy $3 bags of pasta and $9 boca burger cartons.

Friday, December 30, 2005

French Women Do Get Fat

I was sitting at my local Barnes and Noble, reading the latest issue of the Economist today, when I was surprised to find that, contrary to popular perceptions (and the title of a book that was featured on many of the morning shows here in the US) that France has an obesity problem. Yes, it is admittedly less severe than that in the US, where about one in three people are obese, and two in three overweight. But with over 40% of French people estimated to be overweight, this is a serious problem for them too. A Google search revealed an old story in the Washington Times that reported that 1 in 10 children of age 10 are obese! YUCK!

And with obesity comes other issues like diabetes. In my native India, some 27 million people already suffer from diabetes, a number that is expected to grow to 57 million by 2025, according to this article in the British newspaper, the Gaurdian.

The source of all this global obesity pandemic? Well, it seems there is something the US still does export.

Thursday, December 29, 2005

Want to Make A Point? Change Your Reference

I tell you, I'm tired of journalists using flawed logic to make a point. The latest comes from this piece by David Leonhardt arguing that buying a house is less of a strain today than in the 80s and hence somehow a correction in housing prices isn't imminent. In fact, here's how the story ends ...
"When you get affordability stretched so much, all the creative financing in the world can't stop some correction of house prices," Mr. Rosen, the University of California economist, said. "It happened in Hong Kong, Japan and England."
It looks as if it may not happen, though, in most of the United States.

Why would he compare with the 80s? If you thought it was something to do with how 20 years makes a good timeframe for comparison, you'd be wrong. You see, the way to sell your idea is to pick an arbitrary reference for your argument. For example, if you want to show you lost weight, start your count right after a huge Thanksgiving meal, and end it when you are sick and have lost several pounds. Is it a correct measure? No, but it tells the story you want it to.

So why the 80s again? Well, the federal funds rate in the 80s ranged from 6.5 to over 19%. Of course, the costs of home ownership were high... buying a house in the early 80s was like buying it with a credit card today! Costs have come down now because of interest rates, but that doesn't reflect anything about the value of the asset!

To be fair, Leonhardt does have some reasonable points about just how much incomes have gone up in some communities. But then he somehow tries to imply something about a national market, indicating that housing isn't overpriced except in a few places.

I certainly am not anti-home buying. In fact, I've been advising a good friend of mine to buy a house, because he and his wife will be living in the same city for at least 6-7 years. Time is a friend, because you can wade out troughs along the way. But I certainly don't agree that housing isn't set for a correction. And I'd give an earful if I ever met the Gilberts featured in the story:

The most money that Tim W. Gilbert has ever had in his possession was $15,000, he said, in the form of a check for a job he had done as a carpenter. But he and his wife, Marjorie, were still able to buy a 1936 Cape Cod-style house this year for $176,000 in Poland, about 45 minutes north of Portland. They took out two mortgages rather than making a down payment and they use Mr. Gilbert's $5,000 or so in pretax monthly income to cover $1,600 in mortgage, tax and insurance payments. Ms. Gilbert, a writer, home schools their daughters, ages 4 and 6. "I paid rent for 18 or 19 years," Mr. Gilbert, 38, said. "We waited years and years. We wanted to make this happen."

The most you have EVER saved is less than 10% of the value of the house! Gosh, if that's all the discipline you have, where are you going to come up with the money when those faucets start to leak, the water line bursts, and that heat pump quits?

Sorry, I know I'm opinionated ... that's why I have a blog! But if you can't save enough to put at least 10% down, you have no business owning a home!!

Monday, December 26, 2005

Immigration is Good for the U S of A

Gosh, I'm sick and tired of the attacks on immigration - the latest a move by "conservative" representatives to revoke birthrights for children of illegal immigrants. I put the quotes because I hate labels, and being a conservative myself, don't think its conservatism as I see it to oppose immigration, for reasons I will discuss below.

First a disclaimer. I'm a LEGAL immigrant, and proud of the contributions immigrants, legal and otherwise, have made to this country, be it starting IT firms, running gas stations, serving in academe, or working diligently on grape and strawberry farms. But this is not a post on legal immigration - that seems, for the moment, a less contentious issue, except among leftist unions.

OK, over to the illegal immigration issue. Here's why it's not prudent to oppose illegal immigration - they come because we need them! Pure and simple, supply and demand. We have a serious labor shortage in this country, especially for backbreaking jobs like working in labor-intensive farming operations. (For a touching story of one child and his family's travails as a illegal farmhand, read the firsthand account called 'The Circuit' by Francisco Jiminez). Let's see, at present the US unemployment rate is somewhere south of 5%. By traditional standards, that should have triggered inflation - know why that hasn't happened. Two words - cheap labor ... be it in the form of (mostly illegal) immigration, or outsourcing.

Demographics played a big role in America's surge over Britian and the European powers, but now the same demographic factors threaten US economic supremacy. Short of figuring a way to create working-age humans in the lab, the only way we can get enough productivity at low inflation rates to support the Baby Boomers is immigration.

So whether you are a poor blue-collar worker trying to buy affordable groceries, or a middle-class professional trying to make some money in the stock market, a retiree trying to preserve the true value of your nest egg or a company trying to keep your costs down, stand up and be thankful that there are poor Mexicans willing to risk their lives for the peanuts we throw them to scrub our floors, clean our toilets, make our sandwiches, pick our fruit or process your meat!

Oh, and by the way, I couldn't help but notice the comment from Rep. Tom Tancredo (R-CO), suggesting that rather than seek an outright vote which would likely lose (or at least get vetoed by President Bush), supporters seek to hide the provision in a likely-to-pass bill. This is an old cheap trick by senators and congressman, one that really has to stop! Not that I would have expected that much from Tancredo, who is already in my Hall of Shame, for his stupid comments on taking out Mecca.

Frontline on Diet Wars

I just watched a wonderful edition of PBS' kick-ass show 'Frontline' titled 'Diet Wars' (to watch online, click on the link; the show is split in five chapters). At first, it may appear the same cliched discussion of the different diets, but as the show goes on, there are several less-noticed issues that come up, including reflections on our priorities as a society, and also many interesting (and alarming) facts.

For example, did you know, a teenager today has a 50% risk that he/she will develop Type 2 diabetes in his/her lifetime!! WOW, and I thought I should be nervous because of the sprinking of incidents in our family history!

Even if you are not concerned about your weight or health (either because you don't care or have it under control), this is a show worth watching for its contemplations on contempary society and public policy.

Friday, December 23, 2005

McClellan & Family

The other night, I was watching a NBC Nightly News story critical of the complexities of the new Medicare plan, which is so ridiculously confusing. Part of the story involved a soundbite-sized interview with the Medicare chief Dr Mark McClellan. Last name ring a bell? It should - his brother Scott is the President's press secretary. My first instincts were favoritism at play, although reading the comments of both Republican and Democratic senators about the nomination (last year) suggests he was an excellent choice. Incidentally, their mom is the Texas comptroller, and considered to be a potential gubernatorial candidate!

Thursday, December 22, 2005

Can You Hear Me Now?

I have been trying to understand the wiretap issue a little better this week. While I haven't had much time to watch the news, some of the best perspectives came from PBS' Newshour with Jim Lehrer (simply the best news show to understand issues) and Nightline on ABC anchored by Martin Bashir. The guests on these two shows included an ex-acting director general of the CIA, a legal expert at Georgetown and many other smart professionals who didn't have a political point to make.

Essentially, I think the overall coverage of this story has tended to mix up two seperate but related questions. One, was the wiretapping authorized by President Bush legal? Two, was it necessary?

First the legal angle. It certainly appears from all I have heard that the President's order might have been illegal ... actually, more likely it was a federal crime. The FISA act is supposed to explicitly talk about terrorism not being a factor in changing the rules, and requires the administration to get a warrant, at least retroactively. Certainly, the majority of legal opinion seems to weigh in on the side of Bush having broken the law.

Which leads us to ask, was the subversion of the FISA court necessary? Critics of the administration have argued that the FISA act allows, in the event of an emergency, up to 72 hours (15 days during a war) for the administration to go back and ask for a warrant for a search (after all, that's what a wiretap essentially is) that was already conducted. So why seek to step around the process?

The problem, as several ex-intel officials pointed out, is on two grounds. One, the requirement of probable cause. Intelligence since 9/11 has been a bit of a fishing expedition. They get the cell phone of a suspected terrorist, find 200 phone numbers. Some of these might be people with terror links, but the list might include the guy's barber, for all you know. Do they have probable cause to get a warrant? Tough sell! Should they be following up on every lead as aggressively as possible? Absolutely!

Even when there is probable cause, these former intel officers point out, it's inefficient to have to get a warrant to tap a phone after the fact. That's because FISA was written in the day of landline phones, when suspects would use the same phone repeatedly. In today's quick-turnover cellphone age, terrorists quickly keep swapping numbers weekly, if not more often, and the effort involved in getting a warrant is worthless.

Clearly, it would have been better for the administration to have confronted this problem head on, including as a provision of the Patriot Act. In the days after 9/11, President Bush have incredible leverage to have pushed such legislation through. Rather, he made an unfortunate choice of trying to do things behind the curtain, which has come back to hurt him.

In a later post, I'll explore the possible fallout of this scandal on the Bush Presidency, and the 2006 and 2008 elections. Until then, I'll be following this story very closely, hoping to pick up some other perspective on the issues involved.

Wednesday, December 21, 2005

Populism at Work in India

Score one more for populism in India. The Parliament is in the process of passing a bill which will require most private educational institutions, even those without federal or state support, to reserve a certain number of seats for people who have historically been socially backward. It's affirmative actiion with actual quotas. What's wrong with that? Well, for starters, the track record of such a policy in state colleges has been abysmal. Rather than actually benefitting the classes it is intended to, it eliminated seats from play because of insufficient applications from members of a certain community, and also eliminates any level of academic standards for those that make it through. These students are then completely unprepared for any kind of performance-based system, and usually fall through the cracks (if they don't, there's some chance they will get similar reserved spots in hospitals or public works departments, which would explain the killer state-run hospitals and crumbling infrastructure in India).

But this is also a depressing reminder of populism thriving in India. For all the great economicspeak about India, elections are won by pandering to your base, and when your uneducated base doesn't realize how much your pols are screwing you to keep you down, they think these half-brained schemes are in their interest. So we'll continue to have doomed-to-fail schemes like a National Employment Guarantee, a Right to Primary Education bill and other progressive-sounding bills and initiatives, even when they are just a front for a bulging bureaucracy siphoning taxpayer money, never mind the skyrocketing deficits and lack of actual progress.

Maybe We All Want to Be Treated Like Garbage!

The Transit Workers Union (TWU) strike has brought NYC face-to-face with chaos. Estimates are that NYC is losing of the order of $400 million a day because of this strike! Now, that's what I call a YUCK! But maybe the workers have a point ... after all, they say they are sick and tired of being "treated like garbage" by the MTA? I mean, here's a classic case of workers rising up for fair wages, right?

WRONG! David Andelman writes in Forbes magazine about the incredible pay and benefits that the TWU workers get. Check this out ... the average bus or subway driver is paid $63,000 a year, a rep in a token booth $51,000, they pay virtually nothing into a generous pension plan, ... oh, and they retire at 55! But they are being treated like garbage because the MTA now wants them to put in 4% of their pension contributions. Wow!!

Now, I'm not a traditional conservative who necessarily thinks unions are evil. They serve an important role as an advocate. My mother headed a teachers' union for a while, fighting against a successful school that penny-pinched and tried to screw teachers while some in administration roles allegedly were siphoning money. But I do appreciate how they fought their battles. For starters, their only "strike" was on a Saturday, so that not only were no classes affected, but students did not have to see their teachers protesting against their very own school. I showed up at one of their rallies to support them on a trip home, and was indeed inspired by the dedication of the staff.

Pity the farly better-paid TWU workers don't have the same ethic!!

Tuesday, December 20, 2005

Watch Out for 'em Credit Cards!

Frontline had a wonderful special titled 'The Secret History of The Credit Card' (click on the link to watch the program online, learn more about the issues involved, or take a quiz to test your awareness about credit card issues). It is revealing that most people don't know that your credit card company can change your interest rates at any time with 15 days notice, and charge you any interest rate they want (there's a reason so many of them are in Delaware or South Dakota!)

While there certainly is a need for more regulation (yes, the conservative in me still likes consumer protections), this will be a long time coming. The quicker path for an individual is an embrace of Puritan values - work hard, save and spend less than you make each month. Use your credit card for convenience, but never more than you can pay off that month.

This leads to a larger issue of debt in our lives. We have exposed ourselves to such mountains of debt that we are unprepared for bumps along the way. I was guilty of this when I bought my car. Two and a half years ago, I returned to graduate school, and realized I had to pay over 25% of my gross monthly salary for a car payment! YUCK! Luckily, I had the prudence to buckle down, and with the help of a large income tax refund (also a YUCK because it's an interest-free loan to Uncle Sam) and some extreme miserliness, I paid the loan off.

But before you buy that large-screen TV or a new house, spend some time contemplating changed circumstances. What if you were to get laid off? Face a disability or health crisis? How well protected are you?

Sick of NPR!

God, can someone tell the guys and gals at NPR to at least pretend to be unbiased? I used to love the radio show, and still listen to them because they are the only half-educated radio show on the air, but gosh, they may as well be funded by the Democrats. Most guests are liberals, sorry "progressives" or some other euphemism, and about the only time you will find a Republican is when he critisizes Bush. I lost it right now when they had a discussion on the wiretap scandal. Well, a discussion makes a lot more sense when all the people of the panel aren't diehard liberals who think anyone who supports Bush is nuts!

Look, I haven't yet commented on the wiretap scandal because I'm waiting for more details to unravel. I'm inclined to give rather large leeway to the administration fighting terror, although recent reports suggesting vegan and other political movements may have been spied on, which is concerning. But several lawyers in the White House, Justice Department and other departments seemed to think there was a valid arguement for the president's actions, so how come the media can't?

Monday, December 19, 2005

Taking Back Christmas

The conservative talk radio hosts have it all wrong! The problem with Christmas is not its being packaged as the "holidays", the problem is the bastardisation of the name Christmas. How did Christmas become so completely corrupted by materialism? I spent a good part of 5 hours driving today, and was shocked at parents nervous about getting their hands on a Xbox 360 or iPod Nano, or people generally obsessing about avoiding tensions associated with gifting.

Now, I confess I've never been much of a gift-giver. I don't give gifts for birthdays, weddings, anniversaries, achievements ... you'd better be pleased with a card, if that. But even if you aren't as acrimonious to purported material manifestations of affection, how did we convert a holy day like Christmas to such a cheap and vulgar display of money?

Is this what Jesus' message was? I'm sure he's having a word with the Big Guy, saying damn, maybe I didn't want to go on the cross for this! Jesus' life was one of simplicity and service, something we'd all do well to remember. Too many Christians are just too happy giving lip service to the fact that Jesus went on the cross for their sins, and using it to ignore their own actions.

I say we need a revolution - not one that ponders wether "Happy Holidays" is offensive or not, but one that emphasizes the true meaning of Christmas!

Pricking the Bubble

With all the talk of wiretapping, there was little attention paid to a couple of important news items about real estate that should have gotten people's attention. One was the Housing Market Index, a measure of US homebuilder sentiment, which fell to its lowest level since April 2003! Yikes!!

The other was a news piece that indicated that the value of unsold homes amounted to $500 billion, up 33% since last year!

In fact, I was listening to a local station while driving through Louden County, one of the high-priced areas of northern Virginia, and heard a caller complain of their inability to sell their house in the last 5 months, despite cutting costs twice already. The host (or one of his guests?) chimed in that the median home price in Louden County had falled in the last few months had dropped from $506,000 to $480,000.

These are just early signs of trouble. It is sad that people fail to recognize irrational exuberance, especially so soon after a decade of similar exuberance about stocks. If and when there is a collapse, it gives none of us much joy, because families are going to be crushed, our monetary system affected, the economy may take a knock ... so obviously I hope that all the gloomies and I are wrong, those optimists are right, and things go on. But history tells us that the track record of "soft landings" is rather suspect, and a correction is imminent.

Saturday, December 17, 2005

Shame on PETA

While I've never been a fan of the group People for the Ethical Treatment of Animals (PETA) because of their mostly publicity-seeking star-studded antics, I have usually had a somewhat positive opinion of them because of the cause they espouse, one that's very close to my heart. All that changed when I saw a story on CNN on how PETA has been actively killing animals! (For a short time, you can find the story on the CNN Video page) This is nothing short of an outrage, and a symbol of how many large nonprofits are forgetting the real cause and have become slaves to money, power and fame. Shame on Peta! These pets could have had a loving supportive family, but were instead coldbloodedly murdered!

Ah, the Smell of Fresh Democracy

The Iraqi voters once again showed the cynics just how much they valued their newfound democracy. 70% ... wow, when was the last time the US or any western democracy had a turnout like that? They don't want democracy, they liked to be ruled by thugs, was the refrain of liberal wimps, but indeed the Iraqis showed once again that they'd dogde bullets and bombs to let their voices be heard. Sure, there are still challenges ahead. The history of political development in all countries has been a slow and tortous one, but this is exactly why we have a responsibility to support them, rather than cutting and running, like retards like Howard Dean would prefer us to do.

President Bush argued very persuasively for patience in his interview with Jim Lehrer.
Wars are fought on objective, not timetable ... Victory means the troops are coming out, but troops are coming out does not mean victory.

Incidentally, you can hear that interview here, even though unfortunately it is only in streaming audio, rather than video.

Friday, December 16, 2005

Sen. Incredible!

I learned about the late Sen. Proxmire (D-WI), who passed away this week, from watching Newshour yesterday. I know nothing of this man's politics, but this fact blew me away - he ran for the Senate in 1976 spending $177.77, and then again in 1982, $145.10, all out of pocket. No campaign contributions, certainly no TV or newspaper ads. Wow, that's unthinkable these days, and I dare say was probably so even in those times! You can watch the piece here. God bless his soul, and God bless US and every democrocy with more Proxmires!

College Football and Academic Achievement

This story by Mark Starr highlights what I have long held against college football - the fact that it is a farce! I love the NFL, the superior quality of performances and all that goes with it. I know the athletes play for the money, and noone ever claimed otherwise. College football, on the other hand, is a lie - the supposed theme is that players are amateurs, playing for glory while still studying and getting a college degree. 'Bullshit!' is the pronouncement of a new study, which shows how dismal graduation rates and achievement of academic standards among football players are. Turns out this players aren't quite deserving students after all! That's what really bothers me about college football - the hypocrisy of it all.

Oh, and I've seen another study that some economics professors at Cornell did which shows that having a football program does NOT enhance alumni giving, as is conventional wisdom!

Tuesday, December 13, 2005

Firefox Themes

I just discovered the new version of Firefox allows you to install themes (similar to Windows Media Player). You can find a sampling of themes here. In evaluating the different web browsers, it appears to me that Firefox has gotten way ahead of the competition.

Also, what's up with people not criticizing Apple's policies with respect to their browser? Apple's new Safari RSS handles RSS feeds and tabbed browsing, but is available only if you switch to their latest operating system. Hah, and all those people who embraced Apple as the anti-Microsoft should be feeling very good with the Mac's embrace of Microsoft-style coercion!

Friday, December 09, 2005

Check Your Charity

'Tis the season to give, but be sure your dollars are spent wisely. ABC had a special on how programs targeting the poor are getting less and less money, while nonprofits servicing the opera or a museum are awash in cash. Now is a good time to reevaluate your priorities, and think of those unfortunate brethren suffering the winter.

On that note, do take the time to investigate the charity you plan to give to. Some of the web sites to do this are Charity Navigator, and to name a couple. I was surprised by some information I found on the former site:

  • Habitat For Humanity gets a one-star rating, spending only about 75% of its money on program expenses (i.e. actual charity work)! It spends 22 cents on fundraising for every dollar it gets!
  • The American Red Cross does get 4 stars, but still spends 18 cents on the dollar on fundraising, and has a CEO making a salary in excess of $450,000!
  • By and large, the smaller charities do a better job, in my opinion. For example, among charities that do work in India (where I'm from), one of the standout groups, Asha for Education, spends just a cent on a dollar on fundraising, spends almost 98% of its budget on program expenses, and does not pay its CEO!

That's not to condemn any of the larger charities, just to say do your homework. And remember, as my friend's dad used to tell him,
Make all you can,
Save all you can,
Give all you can.

Tuesday, December 06, 2005

Store Credit Cards Can Screw Up Your Credit Score

David Bach, author of the Automatic Millionaire wrote this essay on four reasons to say no to store credit cards. While most of them are the usual suspects when talking about avoiding credit cards in general, one point was rather significant, even for a disciplined spender who would definitely pay off all his/her balance every month.

One of the factors determining your credit score is how much of your available credit you have used, but this is not just in sum total. Let's say you have cards with banks A, B and C with a credit limit of $1,000 each. Your balance on card A is $800, card B and C are $200 each. Your total balance of $1,200 represents 40% of your available credit, so that won't trigger a red flag. However, you have used more than 50% with a single lender (80% from A in this instance) and so you will lose points in the evaluation of your credit score.

What that means is that a small purchase from your neighborhood Target with a store card could easily do some pretty nasty damage. All for a few free bucks ... that, my friend, is what called cutting an leg to save a toenail!

McD Gift Card

I saw these ads for the new McDonalds Gift Cards. Ah, what better way to say I HATE YOU that to gift them the gift that keeps clogging ... your arteries, that is. I'm not much of a gift person (so far, I've only once got my brother and folks gifts for their birthdays!), but allow me to offer some alternatives to a Mickey D card:

1. One-month membership to a gym, or sessions at a yoga studio.
2. A mountain bike, or gift card to a fitness store
3. A book (yes, enriching your mind is a form of fitness) - no gift card here: take the trouble to find something worthwhile - my vote is for 'Tuesdays with Morrie'.
4. Savings bond, especially if it's for a kid
5. Make your own based on what the person needs.

Anything that contributes to mind, body and soul is a winner. On the other hand, if you are on the person's will, you may want to present the Golden Arches Card after all!

Sunday, December 04, 2005

Your Life is on the Internet!

I have periodically wondered about how our lives are on the Internet, and what the implications of this fact are. For example, this blog tells the world my views, and yet this may not be desirable when I'm seeking employment (for example, a potential employer may be uncomfortable with my conservative views on abortion and politics).

Well, this cuts even deeper. After reading something in a blog I follow, I was curious and looked up some friends' profiles on popular "networking" sites such as Friendster and Hi5. In the course of doing this, I discovered that someone I consider a close friend had recently lied to me about something personal. Sure enough, while snooping, I discovered more about her personal life than I had necessarily wanted to know. While I could write a philosophical post querying why people lie (and I intend to write a broader musing at some point), it also highlighted for me not only how the Net is, in so many ways, impacting our lives, but also how trusting we are currently with putting personal information we would not want even our family members to know out there for strangers to read!

So where does this revolution go? As we acknowledge the proliferation of blogs, personal web pages, networking sites and the like, I can't help thinking there will be a backlash, when people realize how this information can be abused. Bloggers have already discovered the pitfalls of openly sharing their views with the world, often getting fired from their jobs, and I for one would not be averse to deleting (or making anonymous) this blog before I seek real work after grad school.

Friday, December 02, 2005

Say No to Canadian Drugs!

I found this essay by Huber to be a wonderfully persuasive argument against the imposition of drug price controls or allowing large-scale importation of Canadian drugs into the US. I have long felt that insisting a drug company charge the same in the US as it does in Mexico or any other country is foolish to say the least. Now I'm glad someone penned it a lot more articulately than I ever could have!

Thursday, December 01, 2005

USA Today's 'Ask Matt' Column Features My Question

A question from yours truly was featured in the 'Ask Matt' column of USA Today. The question was truncated and missed one key question I had asked, which had to do with impact on the broader (non-construction) market. Since the time I posted the question (August 1!!) there have been a few stories in media outlets suggesting that a housing bubble could affect retail, as people don't "feel as wealthy".