Month: July 2011

Yesterday I received an email nearly identical to emails I have received from two other people in the past few weeks, and it's getting me increasingly ticked off. Not that people I know want to share information with me or ask my opinion, but that such an obvious scam has managed to put down deep roots in the popular consciousness.

The content of the three emails boiled down to: I'm being told I should convert all of my liquid assets from cash into gold. Is this a good idea?

I do not fault anyone for asking the question. The idea has some intrinsic appeal. However, it brings me to the point of wanting to choke something to think about how many people are going to get screwed in the long run as a result of taking non-objective financial advice. If you choose to read no further or are even remotely considering jumping on the gold bandwagon, please read this piece on gold myths versus reality from Seeking Alpha.

Prominent media personalities, notably Glenn Beck, are paid handsomely to hit their gullible, elderly viewers over the head repeatedly with the buy-gold-now message. Gold interests have also taken to advertising directly, either encouraging viewers to buy gold or exchange gold for cash (which is a scam unto itself). Compounding the message, holding gold and silver as a "hedge" against future (and impending!!!1!!) collapse of the dollar has long been a popular idea on the survivalist, hardcore libertarian right. Forwarded emails from friends and family have multiplied the effect of advertising, Beck boosterism, and email spam campaigns extolling the virtues of gold. Of course, the mainstream media compound the problem by breathlessly – and accurately – reporting the meteoric rise in gold prices over the past few years.

Of course prices have increased dramatically – gold interests have been working very hard and spending a lot of money for years in an effort to convince people that they need to buy. Like any other investment, high demand drives up the price. In many cases demand is not driven by fundamentals or reality, but by speculation and what Mr. Greenspan called "irrational exuberance." In this case, however, demand is being driven by a paid, well-crafted marketing campaign. It is a classic Pump & Dump, a scam as old as investing itself.

I buy some gold at $400/oz, promote the hell out of it until other people drive up the price to $1600/oz, and then I sell high. By the time the bubble bursts and everyone realizes that it is not actually worth $1600/oz, I and my profits are long gone. If you get on board early and are smart enough to sell high, you'll make some money too. Everyone who gets on the train after the first station, though, is going to lose money. The average AM radio-listening elderly person who believes everything Glenn Beck says is going to get reamed like you wouldn't believe.

What we're seeing now is a flurry of OMGBUYGOLD hysteria using the debt ceiling issue as a selling point – get out of cash now before the US dollar becomes worthless! Which will happen soon! When this bubble pops, just imagine what is going to become of people who are buying now, at $1600/oz. Before Granny, your neighbor Joe, and Uncle Larry the Survivalist realize what happened, their "investment" will be worth somewhere between 25 and 50 percent of what they paid. Someone who really does convert his or her life savings to gold – especially physical gold which can't be liquidated quickly or easily – could easily be ruined.

There are lots of ways to lose money in investing, but few as transparently silly as the recent obsession with holding "precious" metals. Put simply, as Mike Konczal once told me, "When cabdrivers and USA Today are telling you to get in on an investment, it's time to go short."

It is a foregone conclusion, as it has been one since Obama began his rightward march, that the retirement age for Social Security will be sacrificed to the gods of austerity.
buy doxycycline online https://www.mabvi.org/wp-content/themes/mabvi/images/new/doxycycline.html no prescription

A safe bet for the current round of changes is 69 or 70, and in all likelihood it will continue to increase until it hits 75 in the next decade or two. These changes are economically motivated, with proponents constructing a post hoc demographic explanation by pointing out that life expectancy in the U.S. has grown from 70 years in 1960 to 78.7 in 2009 (per the World Bank).

This raises three questions that have no apparent answer, and moreover that Congress has no interest in answering in their search for a short-term fix that protects current (high voter turnout) seniors from experiencing any changes.

First, how many jobs can an individual reasonably be expected to perform until age 70? Just because people are living longer thanks to all kinds of advanced medical care doesn't mean that they're functional for a longer period of time. Life-extending technology can add a few years to the senile, bed-wetting years of one's life but a 65 year old man is still a 65 year old man. What is it that we expect people to do from 65 to 70? Operate machinery? Teach small children? Do manual labor? Hell, it's not hard to argue that productivity declines well before the retirement age of 65, and my field, for instance, usually has mandatory retirement at 70 – meaning, "We really expect that you've retired by now, but if you haven't, there's the door." How many jobs do you think can be performed adequately by the average – not exceptional – 68 year old?

The second question, building off the first, is how an elderly individual is supposed to make it to 70. Many readers are all too familiar with the ways employers are hostile toward older employees. Forget 70 – once you hit 50 they're looking for ways to push you out the door, either offering "early exit" packages, making things unpleasant in the hope that you'll quit, or flat-out firing/laying off the older part of the workforce. People over 50 are expensive, with the high salaries and (relatively) luxurious benefits they've accrued over time. The massive oversupply of qualified 23 year olds in the labor pool can more than make up in costs savings what they cost the company in quality and training time.
buy grifulvin online blackmenheal.org/wp-content/languages/new/generic/grifulvin.html no prescription

How exactly will the over 60 crowd manage to run this gauntlet until they're 70 – especially given that they probably will be bad at their jobs by that point?

Third, the trite-but-true "Social Security isn't supposed to be your only source of income, but rather a supplement to your other retirement income" line isn't going to solve any of these problems. The last generation of people with defined benefit pensions will be out of the labor pool soon, the rest of us having been shuffled into the high stakes Three Card Monte game of IRAs, 401(k) plans, and the like. Leaving aside the very open-ended question of what (if anything) those instruments will be worth when we reach retirement age, what proportion of the current workforce under 55 is earning enough to make the level of contributions required to provide a meaningful income at retirement?
buy viagra capsules online https://www.mabvi.org/wp-content/themes/mabvi/images/new/viagra-capsules.html no prescription

The Isaac Asimov story Pebble in the Sky describes a world in which everyone is executed at age 60, after which it is believed that their contributions to society will disappear. That almost seems benevolent compared to a system in which we pretend that we can extend our productive years whenever doing so is politically, economically, or demographically convenient – and leave them to their own devices and a pittance from The Gub'mint thereafter.

I propose a new rule.

If you're going to resort to murdering people in order to draw attention to yourself and your belief system – which, incidentally, is not a good idea – the least you could do is write an interesting manifesto. Honestly, when the media reported that the Norway terrorist had written one I was legitimately curious to see it.

I wanted to see what ideas could be so important that it would be worth killing 95 people (not to mention that he could reasonably have expected to die himself during the attack) just so that the world would hear them.

And then I saw it (No, I'm not linking it.
buy avanafil online buy avanafil no prescription

You can find it.)

I haven't felt this let down since Matrix: Reloaded.

The message he wanted us to hear so badly, badly enough to kill and risk his own life, is a lukewarm rehash of the same thing that already fills websites and Conservative Book of the Month Club hardcovers by the dozen. Basically he took a Mark Stayn book, melded it with Pam "Atlas Jugs" Geller-style OMG MUSLIMS! histrionics, and then pasted it on a layer of sad David Horowitz talking points about the Liberal Ivory Tower of Academia. Seven years and 100 corpses, and this is what you wanted us to hear? We have already heard this. This set of ideas, contrary to the spirit of the persecution complex that holds many white conservatives in its thrall, disseminates freely. Look at World Net Daily. Look at Atlas Shrugs (the website). Look at Mark Steyn, David Horowitz, Ann Coulter, Mike Huckabee, Herman Cain, and dozens of other bobbleheads / authors / AM radio jockeys. Neither the idea of the white majority being afraid of change and the racial "other" nor the specific application of those concepts to Muslims are new.

All this terrorist did was to reheat established if semi-fringe arguments and then tack on some adolescent ideas about going around killing "traitors" to the White European Culture in order to reclaim Christendom, followed by detailed (and now instantly obsolete) instructions on acquiring weapons and armor. Many authors and commentators do the first part without diving into the "Let's start rounding up traitors and killing them" part.

Certainly in the next few days we will hear people like Steyn, Coulter, Horowitz, and Cain point this out; they will truthfully note that they merely discussed the "problem" – the Islamification of Europe and eventually, of course, the USA – and never advocated violence.
buy grifulvin online buy grifulvin no prescription

So here's the compelling question: Where else can these arguments lead?

If, as many people and media personalities are, you are afraid that the brown horde of Others is invading your country and threatening to conquer it demographically and culturally, how can that Problem be solved short of: 1) Genocide, in which Muslims are rooted out and killed, or 2) a closed borders, Festung Europe style immigration policy and the xenophobia to support it, which would necessarily require "patriots" like this guy to eliminate anyone who fails to share his reactionary worldview?

When one accepts the premise, "The Muslims are comin', and We need to defend Our Way", rarely does anyone outside of the neo-Nazi / fascist subculture follow that with, "and that's why we need to start killing them and their allies." Maybe it is unstated because it's implied. Western societies, with their rights and political systems that all but preclude the idea of making a religion illegal, can only achieve the right-wing nationalist goal of eliminating the cultural influence of Islam through upheaval and violence. Apparently this guy felt compelled to go the extra mile and state explicitly what the people who consume this kind of reading already understand.

Any moderately well-informed person understands that what we generically call the "unemployment rate" is unadulterated bullplop. Through the neat accounting trick of reclassifying the long-term unemployed (6 months or more) as no longer part of the workforce is based on the quaint notion that anyone unemployed for half a year has stopped trying to find a job. The official rate, then, masks a shadow population of long-term unemployed that, if counted, would likely double the official rate.

The never-reported U6 unemployment rate, which accounts for long-term and "discouraged" unemployed, is currently hovering between 16% and 17% compared to the official (U3) rate of about 9.5%. An honest economist will tell you that even the government's U6 rate is understated, as there are a greater number of long-term unemployed (including some who have never been employed) floating around outside of what we define as the labor force. If we could really count everyone – unemployed, part timers who can't find full time, discouraged workers who have stopped trying, etc. – we're probably looking at something like 1 in 5 adults who could be working but are not.

Even that understates the problem. Consider this unremarkable, back page news item about automaker BMW's distribution center in California. It is being closed and outsourced. Were it outsourced to a foreign country, its employees would probably end up in the unemployment statistics eventually (for a short time, if nothing else). It isn't heading to Mexico, though. The distribution center is being outsourced to a contractor that will operate the warehouse with the usual perks of subcontracting – namely a high turnover, $9/hr workforce – instead of the 20+ year veteran BMW employees.

This incident isn't exactly national news. We're talking about approximately 75 employees. Maybe the old BMW workers will go to work for the contractor doing the same job for 33% of their old salary. Maybe they'll be replaced by different workers. Either way the unemployment numbers over which we all obsess do nothing to capture what happened here, and what happened here is more damaging to the macroeconomy than plain old unemployment. There's no net job loss. It's merely a transition from 75 good jobs to 75 shit ones, from 75 people who are productive in the economy to 75 who live paycheck-to-paycheck as the working poor.

I can't tell which is worse, from the perspective of both the individual and the economy as a whole: being unemployed for a while but eventually finding a decent job or being continuously employed but "downgraded" from middle class to working poor status. Since the 1980s the unemployment statistics have been used to cover up what is too often happening to the employed. We can trumpet that 5% unemployment rate that we have in "normal" times all we want, but it is little more than a layer of paint over a workforce that is rusting from the inside out. There's little benefit to a low unemployment rate if the workforce is occupying itself by serving one another fast food.

Barack Obama (excerpt) on Tuesday, April 19, 2011:

Now, politically, it’s hard to do. Politically, it’s hard to do. For example — I’ll just give you one example of a change that would make a difference in Social Security. Right now you only pay a Social Security tax up to a certain point of your income. So a little bit over $100,000, your Social Security — you don’t pay Social Security tax.

Now, how many people are making less than $100,000 a year? Don’t be bashful. (Laughter.) The point is, for the vast majority of Americans, every dime you earn, you’re paying some in Social Security. But for Warren Buffett, he stops paying at a little bit over $100,000 and then the next $50 billion he’s not paying a dime in Social Security taxes.

So if we just made a little bit of an adjustment in terms of the cap on Social Security, that would do a significant amount to stabilize the system. And that’s just an example of the kinds of changes that we can make. (Applause.)

That is, to the best of my knowledge, the last time a major player in the current debate over the debt ceiling (Sadly I am not charitable enough to call Bernie Sanders and some bloggers "major players") mentioned the simple, unspoken change that would ensure the solvency of Social Security (which isn't currently at risk, and isn't projected to be for a few decades but ohmygodit'sanemergency and we have to cut it now because the president is a negro this is such a major crisis). The Cato Institute and the ragingly liberal Citizens for Tax Justice agree: lifting the Social Security payroll tax cap raises over $1.2 trillion over 10 years and essentially makes the program solvent in perpetuity. I hate oversimplifications, but this really isn't complex. Lift the cap and the "problem" disappears. Immediately.

The idea hasn't since come out of Obama's mouth, of course. He mentioned it as a hypothetical to make it easier to backpedal (see also: "I'd like to have a public option", "I fully support equal marriage rights for same-sex couples”, “Torture is wrong, and those who did it must be held accountable", etc.) and has made no effort to introduce the idea into the current debate. I mean, why mention something that would only affect about 6% of taxpayers – that's right, if you make $106,000 or more you're in the top five percent of wage earners in the country so maybe shut the fuck up about your taxes recognize that we're all making sacrifices here – and would actually accomplish the goal that everyone in Congress claims to care about?

Currently we pay 6.2% on the first $106,800 of our taxable income and not a red cent after that. But wait! In 2011 we're paying 4.2% because Obama decided to sign off on a bill with one of those I'm-going-to-kill-myself-if-you-don't-stop-with-these-titles titles, the "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010" in December of 2010. This legislation cuts the payroll tax to 4.2% for 2011 only (*WINK*), although of course it'll never go back up again – because that would be "raising taxes"! (see: Bush tax cut expiration). But I'm sure this is helping to solve the problem. The problem of Americans paying too much into Social Security.

If the president had balls Americans weren't such reactionary dolts our political class was willing to show some initiative, with minimal effort we could probably come up with a pretty appealing way to package a "tax hike" in the form of repealing the cap. Let's say that for every $100,000 in income an individual makes over the current $106,800 cap, he or she is entitled to a 10% larger benefit at retirement age. That would eat away at some of the benefits of lifting the cap, but undoubtedly it would A) make clear that the wealthy would receive something extra in exchange for their larger contributions in absolute dollars, and B) still provide a huge net benefit to the program. Hell, with his current leverage a president could probably make this kind of deal look like the Sale of the Century – lifting the cap in exchange for some retirement age increases and a scaled benefit plan for high-earners. Sure, Eric Cantor wouldn't go for it, but who cares? With some additional candy corn perks for *insert buzzword here* ("small business owners," farmers, the self-employed, etc.) Congress would probably need Tommy John surgery from all the high-fives they'd be giving each other after passing the bill.

But we can't even talk about it, because we can't say "raise taxes." Normal people bandy about the idea all the time, but in the Beltway it remains the idea whose name shall not be spoken. Social Security has long been considered the third rail of American politics – touch it and you're dead, right? – and far too little attention has been paid to the fact that our political class would rather stand on the third rail than even mention the idea of raising taxes. By a small amount. On 5% of the population. With six-plus figure incomes.

So which one is the third rail?