Walmart (previously Wal-Mart) has unveiled a new logo. And yes, it really is my favorite store.
Congressman Feeney Has It Right
I am totally against any form of mortgage bailout. I also was and still am opposed to Congress’s bailout of Bear Sterns. The reality is very few Americans (proportionally speaking) stand to lose their homes. And if banks and mortgage companies lose money or go out of business then that is the nature of the free market. The real victim of the mortgage fallout is responsible Americans who did not buy more home than they could afford and aspiring home owners who are renting (and not getting an IRS subsidy in the form of a tax break) while they save for the purchase of a home.
It is refreshing to see Congressman Feeney stand up for the forgotten Americans.
Paul Krugman Has Bugged My Office
Two weeks ago I was lecturing two of my coworkers about homeownership. I explained to them that there was insufficient reason for me to purchase a home in the current market, and if need be – I would rent indefinitely. I added that I felt a lot of American’s have been misled into believing that the American Dream is owning a home. I believe the American Dream is freedom and economic prosperity, and for many American’s, home ownership prevents economic prosperity. My reasoning is simple. Many homeowners simply buy too much house and end up being house-poor. Others bought homes in an overvalued market and are now upside in their homes (negative equity.) Owning a home also makes people less mobile, in turn makes it tougher for them to relocate to accept better work. Top that off we the fact that most people own homes outside of the city or in suburbs which requires longer commutes and ever-increasing gas bills. For me, weighing these negatives (and an overvalued market) against the perks of homeownership makes renting a no-brainer for me.
So imagine my surprise when I stumbled across a Paul Krugman article in today’s NY Times that confirmed most of my argument.
Rove Blasts the Economic Rhetoric of McCain and Obama
from the Wall Street Journal:
Rove wants to know why McCain is “angry, frankly, at the oil companies not only because of the obscene profits they’ve made, but their failure to invest in alternate energy.” Rove points out that the airline industy was not pioneered by the railroad industry and that automobiles where not championed by the makers of buggy whips.
Rove’s point is that innovation rarely comes from people with a vested interest in the status quo.
Rove also bashes Obama for singling out oil companies with his disastrous plan for a windfall profits tax. Rove points out that the oil industries “record breaking profits” net them about 8.3 cents per sales dollar which is far less than other industries such as electronics which net 14.5 cents per sales dollar or Microsoft that nets a booming 27.5 cents per sales dollar. He adds that perhaps Obama is looking at the total net profit made by the oil industry, but not even that would put the oil company at the top of the list. The oil and gas industry made $85 million which seems meager to the nearly half a billion made by the financial services industry last year.
Rove makes a couple of excellent points here. Either the candidates are simply pandering or they lack a firm understanding of basic economics. In the case of the latter, however, Obama stands to do much more damage to the economy.
High Gas Prices Are A Step to a Better America
ForeignPolicy.com has a story about how high gas prices are improving America. I am a firm believer that high gas prices equal shorter commutes (equals less pollution if your into that sort of thing) and a lower obesity rate (equals lower health care costs,) both of which are great concerns for a growing number of Americans. It is good to know that I am not alone in this thinking.
Houses in Conway Are Still Overvalued
The original title for this article was “Houses in Conway Are Still Overpriced,” but I am a firm believer in the free market. And in a free market, a fair price for a good is determined by whatever somebody is willing to pay for that good. However free trade requires the absence of force and fraud. And I am not certain that there is not rampant fraud going on in the housing market; but that nugget will serve as the topic of another post.
Since the housing market peak in the last quarter of 2004, housing prices in America have fallen on average by nearly 10%. Housing prices in the Little Rock metropolitan area including Conway have risen 3% in that same time. Now, one could make the point that housing prices in the Little Rock metro were relatively low compared to the market in 2004. But, I don’t think that is the case. It will take 2-3 more years for the market to correct itself in the LR Metro, and that is only if the government manages to stay out of it.
Here is the link to the Wall Street Journal article.
The Myth of the Middle Class Squeeze: Part I
The idea that taxes have been shifted to the middle class is one of America’s biggest myths. The fact is that the lower half of American earners (by household) do not pay any federal income tax. And the richest 1% that Congress is always giving all of those tax breaks to foots 37% of the bill.
He’s Number One
With a net worth exceeding $62 billion, Warren Buffet is now the world’s richest man. Passing his good friend Bill Gates who had held the title for 13 years. Gates slipped to number three on the list. Don’t worry too much about Bill though, he still has a net worth of $58 billion. Here is the complete list.