I see two freighters trolling with a big net between them, picking up a current of garbage, and then maybe using it as fuel, rather than storing it (incinerating plant would have to be built in to the freighters).

This could be funded by the plastics council, and therefore, plastics manufacturers, since most of the garbage out there is plastic.

Why not just charge $1579 for all 12 months?  The following reasons come up:

1. When it comes time to renew the lease, the landlord is going present the assumption that negotiations are starting from the listed rental price, $1895. But that makes for an effective rent increase of ~17%, even if the rent doesn’t go up past $1895.  Most rent increases are of %5. If the economy doesn’t shoot back up in a year’s time for all boats, people are just gonna move again.
2. Landlords are trying to preserve the appearance of higher rents on their rent rolls, which they have to present to banks in order to obtain or maintain financing.  This is what a real estate broker told me.  But when I pressed the broker about the charade that this is setting up, I didn’t get much of an answer.

Reason 2 is a charade.  A loan officer worth his title is now going to look past the rent rolls, to the balance sheet for the period of the lease, and see that there are two big holes for the free months.   This is going to make the loan officer hesitate, just as he would if he saw steady rents of $1579.

That is, assuming the loan officer isn’t in on the charade.  Because maybe he is in on it.  Maybe he is the one telling the landlord:  ”Just keep the rent rolls steady.”  The bank’s goal may be to repackage the loan into high quality bonds.  And if that is the goal, then the loan officer will be happy to see rent rolls that say $1895, and ignore the two free months.  The loan will be described as high quality to some derivatives packaging house, and we’re back to 2007, with junky real estate based bonds being sold off to unwitting investors as high quality paper.  Because aren’t the two free months pretty much equivalent to two missed mortgage payments?

Somebody please explain this to me in a way that puts it in a more positive light.

We always hear the first clause these days, touted as some kind of rationalization for free, ad-sponsored journalism online.

I have not heard the second clause in a long time. Yet, if consumers want an independent, brave, hard-hitting, press, they are going to have to pay for it themselves. No journal that depends solely on ad revenue will ever be truly independent of its ad clients. Ad clients will never be given negative coverage.

On the other hand, the more a journal depends on reader/subscriber revenue, the more it will tell it’s readers what they find useful. The bottom line is: you have to buy news you can use, people.

The program is a boon and lifeline to the industry, not to the homebuyer.  It amounts to a price inflating subsidy on a product — in this case, homes.  Homes are pricing with some portion of the credit factored in, because owners and buyers know not to haggle over the last couple grand.  Uncle Sam will take care of that: hand it to the buyer at the end of the year if the buyer gives it upfront to the homeowner.

This subsidy has only  given people who were going to buy soon a little kick in the pants to buy now.  This is great for realtors and loan originators, because nothing was moving for them before the credit went into effect.  Like Cash for Clunkers did for deserted car showrooms, the First Time Home Buyer Credit is bringing lookers into the empty open-houses.

So it amounts to a small bailout of the real estate industry, which deserves to rot in the grave it dug for itself with its absurdly easy credit, fraudulent mortgages, and bogus securitization.

If the real estate industry really wants to see business, it could try reforming itself by:

• dealing in realistic prices (read: lower),
• building superior quality,
• hiring legal construction labor,
• lending responsibly,
• and what I’d like really like to see: renovating lots that already exist rather than continuing to clear the far out exurbs for new development no one wants to drive to.

You may argue that the industry has already reformed its lending, it is now very hard for people who don’t have stellar credit to get a mortgage.  True, it is.  So, the only buyers able to use this subsidy are very responsible people, who know how to save and manage their money.  Not the kind of person who,

• a: is likely to be pursuaded to make a 30 year commitment by the tease of a tax credit.
• b:  is likely to need the credit to make the purchase.

Let the credit expire, let prices adjust naturally, and let the industry sink or swim on its own merits.  As generous as it may look to home buyers, this was really a bailout of real estate agents and morgtage lenders.  They’re all over DC lobbying for an extension.  If buyers felt so passionately about it also, you’d expect them to be up on the Hill, too.  But they’re not, are they?

And I thought I had trouble with Russian spammers.

What is it about Russians?  Why do they insist on not being trustworthy?

The salary data is taken from the Bureau of Labor Statistics.  Of course the data is searchable on the BLS site, but I thought I could give it a more user-friendly interface, using AJAX and jQuery.

Give it a visit, give it a search, and let me know if you have any suggestions.

Cheers,

Colin

This interview on You Tube is a nice digest of the book.

Why read the book?  It’s a lot more persuasive than Mr. Olberman’s production, very well written, and loaded with facts and statistics that make Klein’s argument seem incontrovertible.

Is it?

Milton Friedman sounds quite convincing defending himself in interviews.  No surprise there, he managed to convince many very smart and strong minded heads of state all over the world to give his ideas a try.

Regretfully, I haven’t read much about Milton Friedman.   But from what I can gather from this book, he was a free market purist.  He believed that the free market could solve all ills, and that the smallest state intervention in the free market was the worst of all possible problems.  Klein claims, and seems to prove quite well, that Friedman’s theories, when put into practice, are as extreme, draconian, and murderous in reality as the theories of Communism taken to an extreme and put into practice.  

Students of Friedman spread out from the University of Chicago in the 60s to practice what they had learned.  What they realized, and with Friedman’s encouragement did not shy away from, is that the drastic economic reforms that are required to create a truly free market economy are impossible to impose on a democratic society.  The people will vote against them every time.  So a great shock that paralyzes a democracy, that numbs people to the point that they cannot fight back, must occur for the reforms to be put into place.  Once the reforms are in, the people will recover and grow into the new free market system.

The great shock, when the theory was first tried in the 70s, was murderous dictatorship, as experienced in Chile, Argentina, and Bolivia.

When Poland and China in the late 80s, and Russia in the early 90s, moved towards capitalism, the reforms were again authoritatively managed.

More recently, his theories have been put into practice following natural disasters, such as the Tsunami of 2004, Katrina in 2005, and in the worst realization of his ideas ever, in the man-made disaster that is Iraq.

Looking back on the 20th century with this book as a lens, I get the impression that to oppose Communism, the Western world needed an ideology as extreme and radical as Communism.  Milton Friedman gave it to us: pure, unfettered capitalism.  The United States, to Friedman’s great chagrin, was far too socialist, and it’s democracy far too strong, to experiment with his ideas.  So he and his students experimented elsewhere, starting in Latin America.

When Communism finally collapsed, it could be argued that Friedmanism was the only idea left, and that it could now progress unopposed.  And it certainly did.  In the US, the non-regulation of new derivatives in the early 90s, the dot com bubble, the housing bubble, the increasing gap between the rich and the poor, the contractor free for all  in the Iraq war, were all signs and symptoms of freer and freer markets.   Friedmanism had nothing  left to defeat except itself (isn’t that how it is with all extremist ideas?), which finally seems to have happened in 2008, with the credit crisis and the collapse of the financial system.  

So lo and behold, in 2009 we find even investment bankers believing in the third way, the middle way, the more socialist way.  Which brings me back to my lesson, that anyone advocating living an idea to it’s extremes is a crackpot to be avoided at all costs.  It will be interesting to see who is the first to show us what socialism taken to an extreme looks like.