Friday, October 10, 2008

Survivalist Instincts Kicking In

I've found myself doing things to live more simply and more frugally over the past 7-8 months. Business has been down about 60% for me this year, which isn't devastating, thanks to Ame's salary, and thank goodness. Toss that together with an economy that had been slumping badly in my opinion for a couple of years (start with the rash of foreclosures a couple years ago), and it made sense to me to begin to look after some measures that would keep my family secure should it get worse.

Of course, it has gotten worse, but I'm not feeling pinched yet. There were some steps we took:

Pay off debts.

Last year, we knocked out a ton of debt, from old college loans, to all credit card debt, to paying off a car loan early. It wasn't sexy, but it's been fantastic not having those payments hanging over us. We don't use the credit card for anything but convenience or travel, and we haven't carried a balance since. 

Live more simply.

I've actually enjoyed much of this. I went to great lengths to plant a functional garden, raising it up off the surface, within cedar walls. It drains well and has excellent topsoil. It even has a section of sandy soil for the cucumbers. The yields were great, and best of all, the food is delicious. It has been a real pleasure to eat organic carrots and tomatoes. They just burst with flavors lost in the process of shipping food great distances to our tables. 

It wasn't big money saved in the garden up front, but just the process of making more soups and stews with lots of leftovers has meant more meals at home, which is a terrific savings. Plus, Isabel loves cooking with us, which is great fun.

I've looked for places to save money at every turn. Even business travel has been improved by crashing at friends' homes, with the obvious added bonus that I get to enjoy their company. When I do stay at motels, I stay within chains where I get points towards free stays. The Choice Hotels chain is great- reasonable rooms, plenty of promotions for points, easy redemption of free stays. 

Get out of the market.

With the inflation that has been going on, and with the foreclosures, I began sensing that having hard assets was going to be essential. Slowly, I moved the investments to gold. Wow, am I glad I did! I know this is regarded as kook stuff by so many in good times, but it's not so kooky now, is it? I urge my friends to do this now. Get out of the market. It isn't done sinking, because our government isn't done engaging in the problematic behavior that caused the problems in the first place. This bailout is going to mean a lot more inflation. Even if the price of gold doesn't go up any more (it will), the worst you will do is preserve your purchasing power as paper money buys less and less.

Still more to do.

I have been accumulating canned foods for emergency use, but I still don't have a full supply for a minimum three-month period, as I would like. Our house has storage issues, so this is a problem. I need to remove old junk to make the space. I would really love to get a freezer and perhaps even an extra fridge. I used to have the bonus fridge, and it was great, buying things that would keep in the fridge at low prices and storing them.

If we didn't have Ame's relatively recession-proof job (she delivers babies at Methodist Hospital), and we hadn't taken the steps to eliminate debt, I would probably be pretty worried right about now, with my own enterprise suffering. It's amazing to find out that you can still live pretty well even in trying circumstances, so long as the preparation is there. 

If you haven't altered the way you live towards preserving your family's security, I urge you to do it right away. Not like a Chicken Little thing here, but the news is getting worse, and I do expect some shortages in the near future. It will be temporary, no doubt. Hell- the Great Depression was temporary, if you catch my drift.
Governments And Prices

I've been blogging for five years about the relationship between taxes and the relative attractiveness of cities. Also, about how government officials don't get said relationship. I had the issues put clearly before me once again, but in a discussion about water policy, in a post title "BassAckWards":
Although I welcome this bit of news (higher prices!), both JN and I noticed the perverse order of things:

1. People use less water.
2. Prices rise.

As I have mentioned before, this order of events is terribly annoying to people. The reason it occurs so often in water is because most water utilities are run on a break-even basis, i.e.: if they sell less water, they have to raise prices to generate the same revenue.

Mainly, government officials never seem to understand the relationship between price and revenue. If the price goes up, consumption goes down. That's great for water consumption and for consumption of other natural resources, if conservation is your goal. It's disastrous in this example, because the city is trying to generate more revenue in response to lower usage. Their result is going to be even lower usage, hence, even lower revenues. (Still good for conservation, though.) If they wanted greater usage, they should lower the price. Well, government officials aren't to be confused with the sort of people who have a clue about economics.

Which brings me back to taxes. Cities that drive away businesses and people of means with their higher taxes tend to look at their falling tax revenues and conclude that to make up the shortfalls, they need to raise taxes. 

Well, duh! That's what drives people away! The revenues aren't going to rise. The population is going to fall. Just look at Cleveland, Detroit, and a host of other cities that have chased their tails, and their wealth away, by failing to understand the relationship between price and use.

As the man so named his post, most government officials are BassAckWards.

Short-Term Disaster

The Bush-McCain-Obama bailout isn't working in the here and now. The Dow is having its' worst week ever. That's a pity, because short-term success is the only success this train wreck could have achieved.  From CNN's early report:
Stock futures pointed to a dismal open Friday as markets around the world got hammered and General Electric reported quarterly results that were in line with Wall Street estimates.
US markets took a beating Thursday, with the Dow industrials plunging nearly 700 points to a five-year low, as panicked investors dumped stocks.
The unholy trinity of Bush, McCain, and Obama make Larry, Curly, and Moe look like Milton Friedman, Ludwig von Mises, and Adam Smith. Heavy reliance on government solutions isn't breeding confidence in Americans. It seems the people have begun to get wise. Allowing the investment giants to fail would have actually generated greater confidence.

Better be out of the stock market and into gold. Libertarians have taken a lot of ridicule over the years for our economic outlooks, but everything that is happening now was predicted- by libertarian and free market economic analysts and policy wonks. Government isn't working. Maybe it's time to give up on what doesn't work, and to embrace the policy recommended by those who predicted this mess. 

Thursday, October 09, 2008

Where Will We Defend Freedom?

(Fishers, IN)- If either John McCain or Barack Obama came out tomorrow and said that he had a plan that would eliminate about half of the newspapers in this country, and furthermore tell you which ones you could read, would you get behind that plan, or would you fight it? Would you say that there was a free market for newspapers in such a scenario? Or freedom of the press?

The Cato Institute's Michael Cannon so describes the Obama health care plan:
"He would let the Federal government dictate the content and the price of every private insurance plan in the United States."
"Imagine Barack Obama as President propose that he was going to have the government dictate the content of every news program in the United States, and eliminate half of the existing programs and newspapers that are out there. Would
you call that a government-dominated system? You certainly wouldn't call it a free press. And that's largely what Barack Obama wants to do with health care."
So says Tanner in the October 7, 2008 Cato Daily Podcast.

There is no doubt in my mind that there is both wilfull ignorance and deceptive talk among the backers of 'health care for all'. They tend to bristle at the word 'socialism', or the phrase 'socialized health care'. Well, what else would it be, then?

Oh! I know! Another drain on our ailing economy.

Wednesday, October 08, 2008

Gas Prices & Chicago Taxes

(Valparaiso, IN)- It's been interesting to note gas prices over the past two weeks, as they've been dropping. One thing that remains is that there is a huge difference between what you pay in Chicago and anywhere else. Here's what I've observed, and what I've paid for regular unleaded in the past two weeks:

9/18, Chicago: $4.60/gallon
9/21, Fishers, IN: $3.69/gal
9/22, Rock Island, IL: $3.74/gal
9/23, Prairie du Chien, WI: $3.56/gal
9/24, Viborg, SD: $3.29/gal
9/25, Western Nebraska: $3.14/gal
9/26, St. Louis, MO: $3.39/gal
9/27, Fishers, IN: $3.53/gal
10/1, Fishers, IN: $3.39/gal
10/4, Fishers, IN: $3.24/gal
10/5, Lebanon, IN: $3.18/gal
10/6, Joliet, IL: $3.79/gal
10/7, Blue Island, IL: $3.78/gal
10/7, Valparaiso, IN: $3.39/gal

Chicago and the adjacent small towns & cities are consistently 60 cents a gallon higher. I make it a point NEVER to buy gas in the Chicago area. Fill up by Merrillville at the latest when going up I-65, as a rule.

Cost of living is certainly one difference to explain it. I imagine taxes are another. What I can't explain is why Chicagoans are good with it.
Update: Three more prices to report from last night:
10/8, Joliet, IL: $3.79
10/8, Gary, IN: $3.36
10/8, Lebanon, IN: $3.07
Really- Why do Chicagoland residents accept being gouged so? It isn't merely on gas prices, but on all prices. I bought in Gary on the drive back. I ran the tank down pretty low to get the heck out of Illinois. At 43 cents/gal difference, on a 12-gallon fill-up, I saved $5.16. Imagine how many times per day this decision is made, and how the Illinois economy suffers, and the Indiana economy benefits accordingly.

Monday, October 06, 2008

Wide Market For Politcal Satire

One market that isn't collapsing is the one for political satire. SNL, The Daily Show, and The Colbert Report are great, but you're missing out if you don't check out The Onion from time to time.

Obama Promises To Stop America's Shitty Jobs From Going Overseas
Bailout = Security, Huh?

So much for the transfer of wealth from earners to bad decision-makers ending up as some kind of immediate safeguard. It was supposed to make investors and markets here and around the world secure and stable, right? From an early AP report today:
Wall Street tumbled Monday, joining a selloff around the world, as fears grew
that the financial crisis will cascade through economies globally despite
bailout efforts by the U.S. and other governments. The credit market remained
under strain, and investors piled into government bonds. The Dow Jones
industrials skidded more than 200 points.


Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

Would have been better just to let the bad actors fail. If you believe in the common good, you cannot accept that it was best to give bad actors a gigantic infusion of cash at the short-term and long-term expense of everybody. We are getting hit with tomorrow's taxes because of the bailout. We are getting hit with a weakened dollar because we will borrow to 'afford' the bailout. And our markets are not stabilizing. They are crashing. Way to go, geniuses.

Punish those who voted for the bailout. Vote against McBama. Vote against Andre Carson.

Sunday, October 05, 2008

Stick With What You Know

Sometimes sportswriters try to get cute and prove they have some depth, so they trot out a story that reaches into politics or everyday life. Bob Ley and "Outside The Lines" are notable exceptions, in that they can pull it off. They have the depth, because they are in touch with people.

Bob Kravits showed that he is out of touch, and out of his depth, when he posed this question in Sunday's Indy Star column:
When Michael Vick was led toward a federal courthouse, weighted down by handcuffs, leg shackles and several charges involving the depraved sport of dogfighting, protesters and unaffiliated citizens stood on the sidewalk and hurled invective at the doomed NFL quarterback.

When Helio Castroneves was led toward a federal courthouse Friday in Miami, also weighted down by handcuffs, leg shackles and felony charges of tax evasion, curious onlookers and IndyCar fans around the country prayed that the charges were false, and that Castroneves would eventually be found guilty of nothing more than ignorance.

So where's the righteous rage this time?

Real simple, Bob-O. America found what Vick did to dogs heinous and loathsome. America similarly finds paying taxes heinous and loathsome. I know that even if Castroneves is guilty of tax evasion, I'm rooting for him, because I believe it's his money. I have no soft spot for a guy like Vick who bred dogs to fight and electrocuted dogs that didn't do it well enough.

Kravits tried to make it racial. Load of Crapola. Must not have been paying attention the last five or so years to Lou Dobbs, Sean Hannity, or any of the other modern Know Nothings, who have demonized anyone with darker skin and a Hispanic sounding name.
Time To Talk About The Federal Reserve

It's rare that circumstances make it such that Americans take an interest in monetary policy and the Federal Reserve. Usually, such talk is the kind of thing that gets 'tinfoil hat' comments. However, we are living under such circumstances, and people are beginning to see that printing money without backing by assets is dangerous business, and is the business of our Treasury.

Here's a link to a debate about the Fed that is already underway. A shame place for comments wasn't made available. I am at your service.

I find it instructive to look back on the Federal Government's recent actions against NorFed and the Liberty Dollar. Mainly, it shows a deep commitment to valueless paper money and to inflationary policy.