The Eclectic One

…Because labels are a poor substitute for thinking

Archive for the ‘economy’ Category

Why Toyota Is Going to Be Just Fine And GM Isn’t

Posted by Bill Nance on February 10, 2010

I just got a robo-call from the dealership where we have our Toyota Yaris serviced: Toyota of Nashua.

The recording said that in light of the recent recalls they wanted to let their customers know they were changing their service department’s hours. -To 24/7 until further notice.

The recording gave me the option of pressing 1 and getting connected with the service department right away.

Love them or hate them, THAT is good service and good customer relations.  -Two things I’ve never received from GM.


Posted in economy, Le Snark, Miscellaneous | Tagged: , , , , | Leave a Comment »

What’s Wrong With This Picture?

Posted by Bill Nance on August 30, 2009

I was browsing MSNBC this morning and ran into this little gem of an article about a redevelopment of a housing project in Watts, CA.

LOS ANGELES – Juanita Sims has lived in the notorious Jordan Downs project in Watts for nearly four decades, raising eight children behind the barred windows of the cramped barracks-like apartments.

Let me get this straight: Sims has lived for free in a housing project since the age of 33ish, collecting welfare and raised eight kids there? And she’s still there?


Watts is virtually right next to Long Beach and is a relatively easy bus-ride from West LA or northern Orange County, all places with plentiful job opportunities. Work is hard to come by in Compton, but taking the bus to work is something I’ve managed to do for years at a time. In other words, there isn’t a reason on earth why someone, even someone not too bright or very enterprising, can get a job; if perhaps not a very good one. Welfare-to-work programs have been available for decades, helping people pay for childcare, education, healthcare and even housing.

I’ve never been one to blame the poor for being poor, but at some point, it stops being the fault of bad breaks and starts being the responsibility of the people who live in poverty when there are alternatives. Minimum wage jobs suck and the pay stinks, but it’s a start. That first job teaches you how to hold a job, how to take orders and some, if not many skills. From that really crappy job you move into a marginally less crappy job, making a little more, learning some new skills and move onto another still-less crappy job. Somewhere along the way you get some training or develop some skills that are actually in demand and can live in something other than poverty if not great comfort.

In other words, it’s the same path millions of us have all taken. My first job was as a deckhand on a fishing boat in the summer. My first real job was working at McDonald’s, where I juggled that and a second minimum wage job so I could pay the rent. From there I went to another job waiting tables making a whopping 30 cents an hour over minimum wage ($3.40 an hour woot!) and made some pretty measly tips as well (It wasn’t exactly a high-class joint). I did all this before the age of 17 because I’d been out of the house since 15! That’s right, no high-school diploma. Hell I wasn’t even legally allowed to work. I lied about my age on every application. When I turned 17 I took the California High School Competency test, receiving an actual high school diploma so I could join the military. From there it was all progressive improvements.

A note to Juanita and those like her: Keep your damned legs closed and get a job. Raising eight kids in the projects and spending four decades on the dole is pathetic, not something that inspires pity.

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Our Recession -For Now

Posted by Bill Nance on May 22, 2009

Andrew Sullivan has a terrific series running called: “The View From Your Recession.”

I highly recommend it, you can read every thread from here.

From our end I thought it might be worthy noting what our recession is like.

To be honest, it hasn’t affected us much. We had one credit card cut back on our limit, but other than that we’ve seen no personal effects.

We have a decent income and are able to meet our bills without any great difficulty. More importantly I think, is that we already lived like monks before last fall.

Our discretionary spending has been essentially zero for a very long time. It’s  habit I learned from being poor and I’ve never moved beyond it. When it’s time to give to others we’re generous. But when it comes to us, well, not so much. We do without lots of things, like presents to each other, frivolous things like flowers for a holiday ($100 per) etc.

What does that entail?  Well, first of all our eating out is essentially nil. We don’t go out to movies much and when we do go out it’s usually something free like a park, the local nature preserve where we can let the dogs off-leash to enjoy themselves or something of the like that’s free or at least very inexpensive.

Our only real expense, entertainment-wise is ammunition, which we save on by reloading.  It’s amazing how much money can be frittered away on things like super-expanded extra cable, a couple nights out on the town and lunches eaten out instead of brown-bagged, but it all adds up.

We buy our clothes from factory outlet stores, we shop in New Hampshire a couple times a month in bulk to save on sales taxes and generally try to save whenever we can. All in all I’d say it’s saving us an average of $300-500 a month. I don’t know about you, but $3600-6000 a year is a lot of money to us.

Our needs are very simple. Food, clothing, housing and doggy-care. The rest we take on a priority basis of “What will we be doing with this in six months?” If the answer is “nothing” then we generally don’t spend the money.  Internet is an essential for us, but we figure that’s money well-spent, for employment if nothing else (We both use it for work).  Ammo is strictly an entertainment thing and really one of our few luxuries.

What are you spending?  On what? Does the recession affect you? How?

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Holy Abuse of Power, Batman!

Posted by Bill Nance on December 12, 2008

Well, sure as Hell, as I predicted, President Bush is going to use the total power ceded to him by congress to do whatever he wants. The latest? Bail out the auto industry, over the objections of the Senate.

The Juice:

The White House said today it would be “irresponsible” to let Detroit’s automakers collapse and suggested it will use a bailout fund it had previously said was not meant for the sinking car industry.

he revised view came the morning after senators killed an effort to provide $14 billion in emergency loans to Detroit automakers when a last-ditch attempt to renegotiate the deal collapsed. The House had passed its version of the measure on Wednesday night but the Senate was unable to follow suit.

“We will consider other options if necessary — including use of the TARP program — to prevent a collapse of troubled automakers,” White House press secretary Dana Perino said today.

TARP was a bad law. It was a stupid idea to give the Bushies, the most incompetent and corrupt administration since Grant, virtual Carte Blanche with $700 billion and many, including yours truly,  said so at the time.

$14 billion isn’t going to help the Big Three. Try $150 billion. This is just the proverbial camel’s nose. And Senate Republicans were right to refuse to go along with the plan.

There’s no way on God’s Green Earth Detroit is suddenly going to get it’s act together just because they get taxpayer money to finance their incompetence. Let it die for God’s sake and let something worthwhile take it’s place. Better short term pain than long-term insolvency which only postpones the inevitable anyway.

When the Democrats start crying foul over this latest move, tell everyone who voted for TARP to STFU. They did it, the Bushies are just doing what every rational person predicted they would in the first place.

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Bailout wasting Billions. Surprise surprise

Posted by Bill Nance on December 2, 2008

Bush Administration completely screws up bailout plan…Film at 11.

From the WAPO:

The head of a new Congressional panel set up to monitor the gigantic federal bailout says the government still does not seem to have a coherent strategy for easing the financial crisis, despite the billions it has already spent in that effort.

I said it at the time and so did others. The bailout passed by congress was a steaming pile of dung.

Congress handed a $700 billion blank check to an administration with the worst spending record in the country’s history and notorious for its cronyism and incompetence. No one should be surpised that Paulson has changed course three times and congress has no effective oversight.

Again I say it: Democrats, get your act together. Pelosi and Reid must go.

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Government bailouts and “helicopter parents.”

Posted by Bill Nance on November 26, 2008

There’s an interesting column today in the Detroit Free press about accountability, bailouts and parenting.

The Juice:

You can hardly walk into a public school these days without hearing about helicopter parents and the damage they are inflicting on the current generation of American schoolchildren.
In the latest edition of their classic, “Parenting with Love and Logic,” parenting gurus Foster Cline and Jim Fay (who coined the term a generation ago) argue that moms and dads who are “forever running lunches, permission slips, band instruments and homework assignments to school” are short-circuiting the natural consequences that teach children to take responsibility for their actions and omissions.

“The real world does not run on the bailout principal,” the authors warn. “Traffic tickets, overdue bills, irresponsible people, crippling diseases, taxes — these and other normal events of adult life usually do not disappear because a loving benefactor bails us out.”

Well, no — not usually.

But these are hardly usual times. And since 2006, when Cline and Fay wrote those words, the bailout principle has been making a big comeback wherever the real world threatens to exact a price for irresponsible behavior.

Something to think about…

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GM Bailout: Thanks, but no thanks

Posted by Bill Nance on November 12, 2008

Meagan McArdle has some thoughts on bailout of the Auto Industry:

The Juice:

I think this misses the point of the financial bailout.  Whether or not it works–and I sure hope it will–I don’t think very many people wanted to bail out the financial industry because we were so moved by the plight of those plucky traders on the mortgage desk.  We bailed them out not because they deserved it–they didn’t–but because if we didn’t, there was a very big risk that they would take us down with them.

This is not generalizeable to other industries.  Money is weird.  Finance is weird.  There is no other industry that is, first, so tightly coupled, and second, severely affects every other industry in the country.  Moreover, there are few other industries that are so vulnerable to panic.  Strategic injections of capital can actually salvage operations that are otherwise sound.  GM’s operations are not otherwise sound. (emphasis mine)

Let there be no mistake, America is in for some very serious long-term pain. Government action is going to be required to mitigate some of that, but we can’t be so short-sighted that we continue to merely put off the inevitable to score points in the next election cycle.

The primary reason Detroit continues to do so poorly is that they continue to produce vehicles that no one wants, which don’t hold up over time and cost too much.

Pouring more money, at taxpayer expense, into companies which are fundamentally broken and have been so for decades is nothing more than writing a hot check to stave off the inevitable.

We’re currently driving a Toyota and a Subaru. Before that, we had a Ford-made and a GM-made car. We are not driving American cars because they cost too much, they get lousy gas mileage, they break down constantly and retain no resale value.

It’s time to let GM and the rest go down the tubes. Let the lines be sold to a new startup who is committed to producing cars that don’t suck. Maybe some of the supply-chain companies can form a new company from the ashes of these unprofitable, incompetent behemoths. And maybe labor can be smart enough not to kill the goose that lays the golden egg when it comes time to negotiate new contracts.

I’d much rather see government loan cheap money to someone with a solid business plan than send more of my money down the existing Detroit rat-hole.

Posted in economy, News & Analysis, Politics | Tagged: , , , | 2 Comments »

Smart money

Posted by Bill Nance on October 6, 2008

Bank of America makes another very smart move.

The Juice:

Facing a lawsuit over deceptive mortgage practices, a Bank of America Corp. subsidiary has agreed to modify tens of thousands of loans to keep people in 11 states from losing their homes, the Illinois attorney general’s office said Sunday. Borrowers stuck with Countrywide Financial mortgages that they can’t afford could see their interest rates reduced or have the loan principal cut. Some might qualify for having to pay nothing but interest for a decade. Even people who can’t afford to keep their homes with such changes will be able to get help moving to a new home. “This is going to provide a tremendous amount of relief,” said Illinois Attorney General Lisa Madigan.

As I wrote the other day, one of the key parts of being a successful mortgage lender is smart loan servicing.

Contrary to what many people think, banks are not well served by foreclosures. Banks are in the business of lending money, not wheeling and dealing in real estate. The smart lender is always interested in striking a deal to keep people in their homes if it’s at all reasonably possible. This is even more true when borrowers are “upside down” on a mortgage.

With this move, B of A settles a giant lawsuit, is likely to benefit financially (getting paid a little less or a little later is a LOT better than taking massive hits from foreclosures) and heads off some truly punitive measures coming from regulators. Not to mention some very good PR.

Smart lenders are in business for the long haul; and with a long view, B of A will probbly come out of this mess far ahead of many other institutions because of this move. Bravo!

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Pelosi and Reid must go

Posted by Bill Nance on October 3, 2008

There’s an old saying that goes: “The Democrats are the party of no ideas, and the Republicans are the party of bad ideas.

Nowhere have I seen a more clear demonstration of this old saw than in the bailout bill just passed by Congress, not to mention the sad excuse for one which failed in the House last week. I’ve written about the downsides of the Paulson plan before. Too much authority transferred to the executive branch, not enough oversight and no guarantees the assets purchased will be bought at prices which would give taxpayers sufficient equity in the entities that sell them.

Once again the Democrats in Congress have showed they have no ideas of their own, no concept of courage and no willingness to do anything which might jeopardize their own careers. They actually managed to pass a plan that’s even worse than the one last week, including, you guessed it, earmarks. Hard to imagine it, until you remember who’s running Congress.

Don’t get me wrong, the Republicans are just as bad, if in different ways. But at least they have, on rare occasion, showed the willingness to stick by principles, however foolhardy said principles may be.

Democrats, since January ’07 when they took office as the majority in congress, have not done a thing to oppose the Bush Administration other than to posture. No reasonable person wanted or expected them to force an immediate pullout from Iraq, but a timeline or a specific re-definition of goals was a perfectly reasonable position. They didn’t do it. They didn’t rein in the irresponsible spending of the Bushies, they couldn’t even manage to get a strict anti-torture bill passed, much less serious investigation of the no-bid Halliburton contracts, illegal wire-tapping etc.

Nancy Pelosi and  Harry Reid can blame Republican filibustering in the Senate and they can blame Bush vetoes. But the bottom line is, they weren’t ready to stick to their guns on any issue of substance. When it came time to force a showdown, as usual, they balked.

I’ve never been fond of the Democratic Party.

There are a litany of reasons for this, from their tendency to spend money like a sieve leaks water, to their complete lack of testicular fortitude as a party. But here they missed an opportunity to do some genuine good for the American people AND the economy, and once again, they failed miserably.

Bush and Paulson are desperate for a bailout plan. The American people were desperate for a bailout plan, if not the one proposed by Paulson.

The bill, which was and is unpopular, could have been made to be a lot more palatable to Americans. The bill could have passed the house on a party-line vote and Dems could have simply dared the Republicans, already hugely unpopular, to filibuster/veto the bill. The bill would have passed. The Republicans may have screamed bloody murder, but it would, in the end, have passed.

In case you missed the point, this is what’s called being in the opposition.

What might they have done?

  • A 10% across the board pay cut for every federal employee making over $100,000 per year (including congress).
  • Capping interest rates on credit cards to Federal Cost of Funds +10%
  • Extending the tax cuts on small business and credits for alternative energy research and paying for it with cuts to SDI and all subsidies to oil exploration and development.
  • Requiring all new foreclosures to certify a set of alternative payment options (temporary repayment suspensions, one-year interest rate reductions to FCoF+ 6%, etc) have been offered and declined.
  • Cutting (insert Federal agency or agencies of choice) funding across the board by 10%

I could go on and on. The bill could have been crafted to be both popular among the Dem base and sufficiently aggressive on spending cuts no one would even notice to seriously offset costs. Even some Republicans would have jumped on board a bill that was more fiscally responsible and held the money for the bailout to better oversight.

They chose to do none of the above. What’s worse is that after caving initially and still not getting the Republicans to play ball, instead of crafting their own alternative, they just caved even more.

Harry Reid and Nancy Pelosi have demonstrated over the last two years that they wouldn’t know leadership if it bit them in the ass. It’s time for them to go before they can do any more damage.

Posted in economy, News & Analysis, Politics | Tagged: , , , , , , , | 2 Comments »

Foreclosure nightmare

Posted by Bill Nance on October 3, 2008

The video below shows a snapshot of foreclosure effects in Southern California’s Inland Empire.

Notice the presenter at the very beginning of the video, talking about one of the most devastating economic crises since the Great Depression with a grin on her face. -Nice to see she cares.

Vodpod videos no longer available.

Hat tip: Andrew Sullivan

Posted in economy, News & Analysis | Tagged: , | Leave a Comment »