Category Archives: Economics

Congestion Pricing – Your Ticket To Savings

Congestion pricing—the notion that inner city drivers must pay fees according to the miles they drive, gas they consume, or carbon they emit—may soon make the lives of London’s inner city drivers more miserable than they already are. Smog breathing pedestrians, on the other hand, will probably cheer stiff new carbon emissions fees. After all, nothing says, “Take public transport moron!” like a $50.00/day fee to drive your Range Rover from Chelsea to Westminster.

But is it really going to deter the well-heeled from schlepping their kids to school in the civilian equivalent of a tank? Probably not. Take, for example, the attitude of one Kensington mom:

We’d have a massive loss if we tried to sell our cars. And I can’t have a tiny little car because I have three children who go to three different schools. At the moment, we just have to pay. We really have no choice.

What utter nonsense! First, one wonders what about multiple schools is relevant to the size of one’s car. Second, get rid of the SUV, put the kids on public transit, and you make up any possible losses in the first year. I mean…gas in London is going for the equivalent of $8/gallon. So let’s say that you save a gallon per day at that price, tack on the new congestion fee, and right there you’ve got $290/week or a whopping $15,080/year. And that doesn’t even count the cost of bloody Rover, maintenance, and insurance (which I imagine for London must be a crippling cost).

So…is it cruel to put the kids on public transit? Maybe, but tell ’em it’s going into a college trust fund, and maybe they’ll think differently in a few years. The point being: Congestion pricing is coming to larger cities whether one likes it or not. You can hold on to your foolish attitudes about needing a car…SUV…whatever, or you can give in to the inevitable and accept it. Because you know what it really is? Manna from f*cking heaven, that’s what!

Find a new penal colony

Telstra CEO Sol TrujilloThe US had Ellis Island, Australia, Norfolk Island. One proclaimed “send me your poor…”; the other simply “send me you crooks”. Both are closed now and sending US corporate crooks to Australia is no longer appreciated.

One in particular, Solomon “Sol” Trujillo, CEO of Australia’s major communications corp., Telstra has managed to give the whole species of American corporate heads a bad name downunder.

Sol came out of US West or QWEST as you know it now. He escaped the scandal swirling around that venture by heading across the world, for now at least. His other major claim to fame is head Hispanic fundraiser for the Repugs.

Here in Australia Sol is taking the position that regulation [is] riskier than recession. Ok, that is a US corporate view, but it will never sell here in a country where even under Bush best buddy Howard oversaw a regulation industry.

He is not on his own, the corporate heads are all trying to tread water and recover some of the gains they made under John Howard’s Americanisation regime. Attempts to impose these US corporate concepts here is fraught with risk.

Look what they are up against, and the Rudd government has not been in power long enough to create of 600 regulatory agencies across the country, with a budget of at least several billion dollars and staff numbers of 34,000 at the federal level alone.

Even Chainsaw Al – Al the Ax etc., Al Dunlap had to head home to the states to carry through his ‘downsizing corporations’ strategy to its ultimate conclusions. You might recall that in the process he nearly destroyed Scott Paper and Sunbeam Corp.

The big worry here in Australia is that if a new Democrat regime does not legalise cock-fighting and appoint SOL as CEO he might not have any great incentive to leave our shores.

A war with a price tag

Nobel prize winning, former chief economist with the World Bank, Joseph Stiglitz has coauthored (with Linda Bilmes) a book on the Iraq conflict. There are lots of books on Iraq, but few so revealing. It is called ‘The Three Trillion Dollar War’ and based on that that price I will concede use of the word war.

Let’s start with the trivia, just to get the mind around some numbers.
Private security contractors earn up to $1222 a day; army sergeants between $150 and $190 a day.
• Bush economic advisor Larry Lindsay said the war would cost $200 billion
Donald Rumsfeld called that figure baloney and quoted $50 – $60 billion
Andrew Natsios, Agency for international development, quoted reconstruction at $1.7 billion
Paul Wolfowitz thought the whole shebang would ‘pay for itself’.

Some hard numbers
• Iraq is currently costing US taxpayers $12.5 billion a month
• Seven US soldiers are injured for every fatality
• In Vietnam there were only 2.6 injuries per fatality
• 45% of the 7000 US troops in the first Gulf War filed for disability which now costs $4.3 billion a year.

I haven’t done the math yet, but $3 trillion sounds impressive. We are assuming around 45% disability claims on much higher raw numbers and actual casualties.

The good news is, as the bills start to trickle then flood in, the US will not be in any economic shape to prosecute any more of these misadventures, at least for a generation or so. The Bush administration has just pissed your future up against the wall.

Fix Social Security – Pay Off The Boomers

Back in 2005, when Bush couldn’t stop yammering about his damned Ownership Society, I published a plan for opting out of social security. Now, with Treasury Secretary Paulson once again warning us about the dire state of the trust fund, it seems like a good time to revive that screed.

You see, all conservatives want to do is privatize the system, thereby creating enormous profits for Wall Street in the form of commissioned ‘busy-work’. Liberals, in contrast, don’t have the balls to attempt any meaningful reform because 40 million baby-boomers (of which I happen to be the last) will go ballistic at the mere mention of benefit cuts. Indeed, we’re all about to have the biggest fraud in human history perpetrated against us, and there’s not a damn thing we can do…except: 1) Save for retirement like there will be no social security–because there won’t! And/Or… 2) Pay off the boomers now. Because if we don’t, that generation will suck the dollars from Gen-X, Gen-Y, Gen-Next, Tweeners, Millenials, and whomever comes after like vampires sucking blood from a maiden.

And how do we pay off the Boomers? Here’s how:

  1. Starting with our next paychecks, nobody pays another dime into social security. Moreover, the employer’s portion is given to each of us in the form of salary. In return–and this is the kicker–each one of us takes responsibility for making our own parent’s social security payments.
  2. Every dollar that we pay to our parents is used to reduce our pre-tax income, 1-for-1.
  3. In addition, over the next 15 years, the Federal government arranges to divert what we’ve already paid into the system into a retirement account that each of us controls (1/15 of the total amount each year).
  4. The Feds get no say—nada, didly, bupkis—about how we invest, or don’t invest, that money, as long as it’s held until retirement. And in return we let the Feds keep what our employers have already paid into the system to cover existing retirees.

Will this be a financial loss for post-Boomer Americans? Maybe. But it will pale in comparison to 20 more years (well…20 for me, at least) of contributing to a system that will never pay us a dime. Not to mention the value of never having to hear another administration hack whine about the social security trust fund when we know, WE KNOW, they don’t have the cojones to do anything about it.

Blogs Against Kleptocracy – Nonsense Taxes

The RIAA isn’t having much luck these days suing music owners in order to pad the music industry’s bottom line. In fact, they’re gonna get dragged into court in a counter-suit where their questionable tactics are going to be submitted to the discovery process. (Oh how delicious it would be to be in that conference room!)

But the ever inventive industry has now got another proposal for getting their hand in your pocket…even if you’re not part of the 1 in 10 who pirates music from online sources. Yes, the culture vultures are flogging the idea that a tax should be levied on all broadband connections—$5.00 per user, per month—to compensate…[ahem]…the artists for lost revenue due to pirating.

Got that? $60/year (perhaps multiplied by every member in your household) multiplied by all 45 million broadband connections in the US—a whopping $2.7 Billion! Now isn’t that a tidy sum to compensate an industry that 1) can’t figure out how to make money and 2) can’t even claim to loose more than $150M per year due to pirating?

But the real danger isn’t just in the RIAA’s ludicrous proposal. Imagine what will happen if other industries realize that they can just invent taxes that compensate them for lost business?

Big Auto will push for bikers, walkers—literally anybody who refuses to drive and especially those who refuse to own cars—to pay a ‘transport tax’ to compensate them for cars they can’t sell.

Big Coal will lobby for a ‘green tax’ that compensates them for revenue lost due to consumers switching to green power generation, buying energy efficient appliances, and turning off lights. Reduce your electricity consumption by 20%, and BANG! the tax kicks in.

The Incarceration Industrial Complex will get to ‘penalize’ states that back away from draconian sentencing laws in favor of rehabilitation and parole.

After all, nobody should have to adapt their business model to changing times, attitudes, or technologies. Should they?

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The IRS will pay you to file your taxes

Have you heard of the economic stimulus package? I’m sure you have. President Bush in a moment of panic, *ahem* economic clarity declared that each American should get some financial help from the U.S. government. He pushed through a stimulus package that offers up to $600 per individual, $1,200 for married couples and an additional $300 for each child for qualifying Americans. Woo hoo, right?

Um, hold on there partner. The IRS has just announced in a article that your check won’t be in the mail until after you filed your Federal tax return. No return, no check. With April 15th fast approaching I’d advise all of you to plug in that Turbo Tax and get to work. You don’t want to miss that big May sale on plasma screens at Best Buy!

Let Bear Stearns Die

President George W. Bush, under fire from Democrats who say he’s doing too little to help homeowners facing foreclosure, said he won’t be stampeded into “bad policy decisions'” that might harm the economy.
Bloomberg, March 15

Agreeing to guarantee a 28-day credit line to Bear Stearns, by way of JPMorgan Chase, the Federal Reserve Bank of New York conceded last Friday that no sizable firm with a book of mortgage securities or loans out to mortgage issuers could be allowed to fail right now.
New York Times, March 16

…the Federal Reserve is taking the extraordinary step of providing as much as $30 billion in financing for Bear Stearns’s less-liquid assets, such as mortgage securities that the firm has been unable to sell, in what is believed to be the largest Fed advance on record to a single company.
Wall Street Journal, March 17

$30B? Of the public’s money? Tell me again whose policies are harming the economy?

Kangaroo Tails

There has been a lot of discussion in Australia about climate change and our food preferences. We curse the bastard who introduced fluffy bloody bunnies to this arid land. We should be cursing the ones who bought sheep and cattle here too.

The fact is our terrain cannot cope hard footed critters, or the ones that eat grass down beyond the roots. Kangas have been surviving this land far longer than the aborigines, and they are one of the longest continuing human groups.

Kangaroo is a common bush food, usually as patties, but that’s because we haven’t explored preparation methods. It is even more common as dog food. But as a meat it is gamey and quite edible.

The trouble is you can’t farm roos like ‘domesticated’ animals. They can jump tall buildings in a single leap. Free range is the ways to go, and the method cuts out a whole agricultural sector, the slaughter house.

All we need is a constant movement of trucks picking up those carcasses. Of course the findings would be best treated as stews or bully beef type products.

I’m just pricing a fleet of refrigerated trucks with bloody big kanga bars. I figure we could harvest and collect in one grand operation. of course it will take time to build a wider market, but for the soup kitchen market, the ones who begrudge spending drug money on food are a clear early target.

The economy of debt

I read online recently that American credit card debt grew by 315% from 1989 to 2006. 315%! I guess I know where I should be investing my money, in credit card companies. They have convinced my fellow Americans to take out 2.2 Trillion dollars in credit and cash advances in the last year alone. You know what that means? They’re making profits like the oil companies!

Am I the only one who find this statistic completely insane? I know that Americans are worried about recession. Housing prices are down, some are defaulting on loans. But I have to ask myself, how the Hell do you run up 2.2 Trillion in debt in one year?! Is it just another facet of the “finance our lives on the backs of our children” mentality or is something even more sinister at work here? What do you think?