Price Controls = bad for everyone

Bank of America, like many other banks, was charging people fees of they overdrew their accounts- $35 for each event. This would mean, with the advent of debit cards, that a $3 purchase could put you in the red and cost you a $35 fee. It wasn’t long before customers fought back by taking their business elsewhere.Eighteen percent of checking accounts were closing each year, as customers voted with their dollars and their feet. Bank of America eliminated the policy and reduced account closures to 13% In other words, the free market worked.

That wasn’t good enough for Congress. They passed a slew of regulations that eliminated these charges. In other words, price controls. Since Bank of America saw 12% of its revenue from the charges that were just outlawed, they responded by spreading the costs among all account holders.

“Customers never had free checking accounts,” Bank of America spokeswoman Anne Pace said. “They always paid for it in other ways, sometimes with penalty fees.”

TANSTAAFL.That is something that I taught my children from a young age. Nothing is free, everything comes with a cost. Either it is pay per use charges like overdraft fees, or there will be some other fee, but I don’t go to work for free, neither do you, and someone has got to pay the bills.

Florida Ballot Amendments, Amendment 4

In my continuing attempt to understand the amendments to the state constitution that have been placed on the 2010 ballot, I am posting my research and thoughts on this blog. This post concerns Amendment 4.

Amendment4, called the Florida Comprehensive Land Use Plan, proposes to require a taxpayer-funded referendum for all changes to local government comprehensive land-use plans. This means that voters will decide every time a WalMart or new development is to be built.

People favoring this amendment claim that the people will be able to control development and claim that Amendment 4 is needed because “our homes and communities are too important to leave in the hands of crooked politicians.”

I would point out that instead of voting on every development because we don’t want “crooked politicians” making the decision, perhaps we could vote those politicians out of a job. Remember that a land use plan that would build a Walmart on one end of the county would be voted upon by people in the other end of the county.

Looking at the financial backing of the Amendment, we see that the following contributions have been made to the cause since 2003:

Lesley Blackner (Lawyer) $828,749
Steven Rosen / Tend Skin Int’l (Skin Care) $635,000
Sierra Club of Florida $186,470
Joe Redner $37,035
Floridians for a Sustainable Population $33,538 

It seems like Lesley Blackner has nearly a million invested in this. Why? I don’t know, and I could not find out, even after an extensive search.

Vote yes if you think that voters should decide in a direct vote, vote no if you think that the voters should decide through their elected representatives.

Edited to add: I have decided to vote no on Amendment 4. Lisa (in comments) has made me see that there is a real problem here: Other people are presumed by the supporters of this amendment to know better what I should do with my property than I do. It doesn’t matter to me if a commissioner decides what I should do with my property, of if my neighbors decide. Either way, I do not get a choice. At least when the commissioner decides, I can talk to him and try to make him see my side of things. If the public is to decide, then I must cough up millions of dollars to run political advertisements to get my message out.

How about an amendment that lets me do what I want with my lawfully purchased property without having to beg for the permission of others?

Firearms are about choices

This IHOP restaurant not too far from my home was robbed at gunpoint just after midnight last night. It isn’t even in what I would consider to be a particularly bad area of town. Robbed at gunpoint while eating a meal, if you are unarmed, you are completely at the mercy of the robber. Many will tell you, “Just give him what he wants,” and have you depend on the mental stability and good will of an armed felon. Your choices are limited.

If I am armed with a weapon, I have a choice. I can choose whether or not I will hand over my wallet. I can choose whether or not to be herded into the back room. I can choose whether or not to watch as the gunman kills others in the restaurant. Or forces the women to strip naked, and cuts the throat of the cook.

People ask me whether or not I would kill someone over the $50 or so that is in my wallet. My answer to them is that the robber is willing to, or he wouldn’t have a gun, and I am not shooting to take his life, I am choosing to shoot in order to save my own.

Others tell me that carrying a gun won’t help, that I will probably get killed anyway. Perhaps, but if nothing else, I have at least marked my killer in a way that will help him get caught. He will be the guy that you find somewhere between the scene of my murder and the closest emergency room with at least one 200 grain, .45 caliber hollowpoint lodged in his chest cavity.

US credit rating drops

The US saw a drop in its AAA credit rating on October 12th, with the rating falling to AA+. Now, AA+ is still a respectable rating, but the trend is disturbing. It isn’t like we didn’t see this coming. Since 2008, we have been getting warned about this. From the October 12th announcement:

“You can see an indication of concern about the easing course the Fed is likely to continue on,” said Sean Egan, who runs the Egan-Jones credit rating agency in Haverford, Pa. “There’s a number of items that are going to be difficult to reverse as we get down that road, starting with the dramatic underfunding of state pension funds.”

The government has run two straight budget deficits of more than $1.4 trillion, with more to come for the foreseeable future. Meanwhile, the Fed is making noise about printing more money to pay down the debt, which will have the effect of devaluing the dollar. Paying the debt with devalued dollars is certainly a way to get rid of debt, but if you are a creditor, this is not good news.

Comments by the Fed have sent the dollar tumbling and helped increase gold prices by over $125 an ounce in the last month. Gold is currently selling at $1378 an ounce, almost double what it was on Obama’s inauguration day.

With this development, it is safer to lend to Warren Buffet than it is to lend to the US Government.What this means is that there will be considerable pressure on the interest rate that the government will have to pay in order to attract “lenders.” People traditionally buy savings bonds and treasuries, which pay relatively low returns, in exchange for the security offers. As the risk you are taking gets closer to the odds of winning at a Vegas roulette table, the payoff must increase to compensate for that risk.

This means that interest on the debt will begin to take up more and more of the budget, as the cost of borrowing increases. This will increase deficits, and cause the rating to be reduced at an increasing rate. Anyone who has ever gotten into credit trouble can tell you that your credit score goes down as your credit card balances increase.

QE2

It turns out that I was wrong. Obama has not spent $3 trillion more than he has collected in taxes-he has spent $4.5 trillion more than he has collected in taxes. The Fed, which has held interest rates near zero since December 2008, launched its plan of printing money to buy US Government debt nearly two years ago, swelling its balance sheet to nearly $2.3 trillion from a pre-crisis level of around $800 billion.

Two years ago, when the program began, the price of gold was just a bit over $700 an ounce. It is now selling at about $1350, or nearly double that. In two years.

Minutes due Tuesday from the Fed’s most recent policy-setting meeting may show that the Fed is planning to launch another round of printing money to buy government debt. Inflation, here we come. Buy gold, buy gold now. Maybe we will see gold hit $3000 before the next election. I hope not, because what that would mean for our economy, I dread to imagine.

Florida Ballot Amendments, 5 and 6

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendments 5 and 6 are being done together because they are Amendments purportedly being placed on the ballot to eliminate gerrymandering of the State (5) and the National(6) legislative districts. Gerrymandering is the tendency for politicians to redraw legislative districts in order to favor their own pet causes.

Redistricting is the act of re-dividing the state into new election districts. By law, it happens every 10 years. And each time lawmakers begin the process, which involves using sophisticated computing, it draws intense scrutiny from critics who accuse incumbents of choosing which voters to put in their districts to ensure re-election.

Pro: Proponents say that these amendments would establish fairness standards for use in creating legislative and congressional district boundaries. While protecting minority voting rights, the standards would prohibit drawing district lines to favor or disfavor any incumbent or political party. Districts would have to be compact and utilize existing political and geographical boundaries. In other words, natural competitiveness and fairness would be required.

Cons: I could not find an opposition group in my search, but this is what I think: The group pushing for this is fairdistrictsflorida.org. On thier site, they claim to be “a nonpartisan group of Florida citizens working to establish constitutional rules to stop politicians from drawing districts to favor themselves.” However, also according to the site, they are sponsored by the League of Women Voters, AARP, NAACP, Democracia Ahora, and the Florida League of Cities, all of whom are dominated by Democrats and their causes. It is run by lead by former Miami Mayor Manny Diaz (Independent, former Democrat), former Senator and Governor Bob Graham (Democrat), former Attorney General Janet Reno (Dem), former State Senator Daryl Jones (Dem), former Comptroller Bob Milligan (R), former Assistant Secretary of the Interior (in the Nixon Administration) Nat Reed (Progressive Republican), and former Judge (and director of several environmental groups, such as the Everglades Foundation) Thom Rumberger (R).

The districts are to be redrawn, but by whom? With the kind of Democrat and RINO support that is behind this amendment, it makes me wonder what the angle here is. According to sources I could find, the law would require districts to be divided in straight lines. This is, in my opinion, designed to use the heavy population of the coast to dilute the rural populations of the inland areas.

This appears to me like the Democrats are trying to wrest power from the Republicans by changing the map of Florida’s legislative districts.

Even though I don’t like either party very much, I do not like many of the laws that the Florida wing of the Progressives have pushed on us, especially in the gun laws department. I think I am going to vote no on this one.

Florida Ballot Amendments, part 2

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendment two:
This amendment is to exempt military members who are deployed outside of the Continental United States, Alaska, and Hawaii from all property taxes on their homestead.

Pro: Those who favor this amendment say that military members who are not able to live in their homes should not pay taxes on it, and besides they are serving their county and should not have to pay taxes.

Con: Those opposing it say that this is an unnecessary perc for a volunteer military who is already being paid for their service.

Vote yes to exempt them from taxes, vote no if they should pay them.

My Take: This exempts military personnel outside the US from property taxes. At first blush, this looks like a tax cut, and I am all about tax cuts. What this really is, though is creation of yet another class of super citizens that get a special privilege because they work for the government. This does nothing to curb government spending, or to cut taxes overall. I will always vote no to anyone spending my money, except for me. My taxes are already high enough. If this passes, they will have to go up again to compensate. No thanks.

This bill will probably pass, because the only party that claims to like tax cuts likes kissing military ass even more. Expect them to get a cut, and expect your taxes to go up and pay for it.

Florida Ballot Amendments

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendment one:
This amendment is for voters to decide on whether to repeal an earlier constitutional Amendment that mandates the use of taxpayer money to support the campaigns of candidates running for statewide office.

Pros: The people who favor this Amendment say that politicians have plenty of money, and certainly don’t need to be spending tax money to get elected.

Cons: Those against the Amendment say that it is in place to help the little guy who can’t raise much money get elected.

Vote yes if you want politicians to spend their own money to get elected, vote no if you think taxpayers should foot the bill to get politicians elected.

Me? I think that someone spending tax money is spending money that the government already took from me, and is therefore spending my money. I will vote against anyone or anything spending my money, except me. I will vote yes on this amendment.

Government workers

No one knows how hard it is to get a government worker to do something any better than another government worker. We have a printer in our report room for two computers to share. It was connected with a USB cable, and depending on who needs to print, we had to plug the cable into one computer or the other. This printer is also a network capable printer, and I saw no reason why we had to continually move the cable. I pointed this out to the chief one day, and he ordered IT to come out and make the change. So, IT came out about two weeks later, removed the USB cable and plugged it into the city network.

The printer didn’t work. They never installed and mapped the printer on the computers that needed it. Computers sitting right next to the printer. I put in a work order and was told how to map the printer. I didn’t have the administrator privileges to make the changes, and IT is always stuffy about users messing with settings. Everything is locked out on the computers. This is the email I sent, sending a copy to everyone in the chain of command, even the chief:

Ever since IT installed the new printer in the station, the printer has not worked. I contacted IT this morning, and they said that each individual person who uses that computer has to map the printer for their use, or the printer will not work. We have never had to do this before, and I am not sure how workable that solution is, especially considering that we have been told many times that we are not to be making changes to department computers, and cannot make the changes without administrator privileges. Is there a way to get this printer working that does not involve every employee who uses it having to make changes?

IT responded with:

Hey, I have this link for you that installs it. So if you could forward this to anyone who needs it. First delete the printer that is there now. Then you will need to click the link below. You will need to agree or open and it will install for you. The printer que box will pop up once it has installed. All you need to do is close it and you are finished. Call me if you still have an issue. The reason you need to load this is because network printers are per profile not pc. But this link will make it easy for everyone to load.

Of course the link didn’t work. No one had the permissions to use the link. Look, if you are in IT and you fix it so no one can make changes to the computers except you, then don’t be angry when people expect you to actually come out and make those changes. Anyway, I got everyone who uses those computers to send a “Reply to all” that they could mot make it work. After the Chief got about 30 emails on the subject, he finally replied with this:

IT *will* correct this issue so you do NOT have to do what he’s saying….the “shared” printer is supposed to be automatically mapped to all the computers in the station. 

 The problem with all government jobs is that it is too hard to get rid of the dead weight. I say this as a government employee who is constantly frustrated at the things other government employees get away with.

Mortgage Bankers Association Strategic Default

I wrote several posts over the past few months talking about the downright fraud that the banks have perpetuated against the American Public, and claiming that the most sensible thing to do from a financial standpoint might be strategic default, depending on your own situation.

The conservative talking point on this, is that you signed a contract and are morally obligated to pay what you owe. The Mortgage Bankers Association takes this as their official position. 

But it isn’t just a matter of the borrower’s personal interest, says John Courson, President and CEO of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: “What about the message they will send to their family and their kids and their friends?”

In 2007, the Association put a $4 million down payment on their $79 million headquarters, and borrowed the other $75 million. When the market tanked and the Mortgage Bankers Association went underwater on its mortgage, they abandoned the property and rented another place 5 blocks away. In other words, they defaulted strategically. See the story from the Today Show by clicking here. The John Stewart show does a follow up, and knocks one out of the park. So much for the morality of bankers.

Strategic default, like any financial decision, should be based on fact, rather than emotion. Claiming that paying on a depreciating asset is the moral thing to do, is the bankers playing on your emotions to squeeze more money out of you.

John Stewart does another piece, and here it is.