Sunday, September 28, 2003
Long Live the Swiss Franc...
--which use to be the only non-debased currency until they decide to follow in the footsteps of the US and the rest of the world.--
This TCS column thanks the Swedes for saying hell NO to the Euro. The Euro is bound to fail as is the ill-fated EU because, as this piece so adriotly pontificates, the EU is based on some countries (read Germany and France) using the lesser countries for their own gain (steal prosperity perhaps???).
Public servants and politicians naturally prefer to increase their power. Maximizing the pyramidal hierarchy allows them to minimize the control of citizens, taxpayers and consumers over the bureaucracy. But such control is absolutely necessary in a democracy. In any hierarchical organization, whether it is a commercial company or a state, the separation between controllers and decision makers is necessary for efficient management. If you want the best allocation of resources and the enrichment of the group, the last word should belong to the ones who pay, whether they are stockholders or taxpayers.
Swedes probably understood the democratic issue underlying the referendum on the euro. It was a good reflex from a small country fearing the control of major European countries, mostly France and Germany, who both have a natural tendency to consider Europe as an instrument of their power. The Swedes refused to subordinate their economic requirements to the European Central Bank, preferring to maintain their autonomy rather than participate in what they see as an increasingly dubious experiment.
--which use to be the only non-debased currency until they decide to follow in the footsteps of the US and the rest of the world.--
This TCS column thanks the Swedes for saying hell NO to the Euro. The Euro is bound to fail as is the ill-fated EU because, as this piece so adriotly pontificates, the EU is based on some countries (read Germany and France) using the lesser countries for their own gain (steal prosperity perhaps???).
Public servants and politicians naturally prefer to increase their power. Maximizing the pyramidal hierarchy allows them to minimize the control of citizens, taxpayers and consumers over the bureaucracy. But such control is absolutely necessary in a democracy. In any hierarchical organization, whether it is a commercial company or a state, the separation between controllers and decision makers is necessary for efficient management. If you want the best allocation of resources and the enrichment of the group, the last word should belong to the ones who pay, whether they are stockholders or taxpayers.
Swedes probably understood the democratic issue underlying the referendum on the euro. It was a good reflex from a small country fearing the control of major European countries, mostly France and Germany, who both have a natural tendency to consider Europe as an instrument of their power. The Swedes refused to subordinate their economic requirements to the European Central Bank, preferring to maintain their autonomy rather than participate in what they see as an increasingly dubious experiment.
Saturday, September 13, 2003
Prudent Bear's market summary opines on the effects of the growing cots of cars, taxes, housing and such as it reviews "The Two-Income Trap". This book looks like an interesting read, so maybe I'll pick up a copy so Ian and I can discuss on the blog. This is amazing information that for some reason very few people are discussing. I think we also can agree from personal experience that the American mantra is to spend, spend and to spend. Nothing to do...lets go Buy Something!!! The only question that remains is when will this catch up with us? -- a live and direct post from funky london where it seems anything goes especially in regards to fashion and expression. an interesting town for sure.
Once the facts are presented it’s easy to say, “I knew it!” Nonetheless, you’ll have to believe me when I say that after I learned about the book called “The Two-Income Trap,” by Elizabeth Warren and Amelia Warren Tyagi. Warren, I shouted, “I knew it! I knew it!”
So here’s the deal with the book. These two clever researchers have figured out that high housing costs are killing us. (I knew it!) In fact, they argue that the squeeze from high housing costs is primarily responsible for a British Thermal Truckload of bankruptcies over the last 25 years. Even the trend toward two-income families hasn’t saved the day because housing prices just keep on rising. In other words, for the last 25 years consumers have been making the same progress as their pet hamster has on his journey to the other side of the room. (I knew it!)
There are some Federal Reserve Chairman, of course, who would argue that all this housing price inflation is actually “building wealth,” and that this type of wealth building is as good for you as spinach and those fish oil pills that some spouses want you to take for $15 a bottle instead of spending that money on fishing necessities. To the Fed Chairman in question, I say “What does a 400% increase in bankruptcies say about your fancy wealth theory?
And later I learn, I’m right again. According to CNN/Money, cars are more expensive than they used to be, even inflation adjusted. (I knew it!) This also jives with my theory that pretty much everything is cheaper these days but stuff produced by monopolies or the government. You know, cheaper food, higher taxes, higher utility bills. Okay, so the car business is pretty darn competitive, but still, I knew it!
Here’s the scoop according to CNN: The 1965 Lincoln Continental had a sticker price of $6,166, about $36,000 in current dollars. There’s no perfectly comparable car, but they suggest comparing it to the Lexus LS-430 which has an MSRP of $55,700, before options. This jives with a Scott Burns article I read once (but refuse to re-read in case I’m wrong), where he found that a front engine Porche in the ‘70s cost about the same as a Volkswagon Bug today. Before scoffing, note that today’s Bug outperforms the '70s Porche, according to Burns. But a Porche is a Porche, of course, of course, and I can’t imagine what a new one of those must cost.
But before we all run out an join a consumer group and circulate a petition to cap the price of houses and German sports cars, we (as the Fed has yet to say) have only ourselves to blame. Okay, we can’t blame only ourselves because that would kill off an entire genre of cocktail party conversation. But get this: According to John De Graaf who helped to write "Affluenza: The All-consuming Epidemic" the savings rate actually fell in the ‘90s even as salaries were going up. (I knew it!) "We were making more money, but spending it even faster," he says. The economic term for such behavior, by the way, is “stupid.”
Once the facts are presented it’s easy to say, “I knew it!” Nonetheless, you’ll have to believe me when I say that after I learned about the book called “The Two-Income Trap,” by Elizabeth Warren and Amelia Warren Tyagi. Warren, I shouted, “I knew it! I knew it!”
So here’s the deal with the book. These two clever researchers have figured out that high housing costs are killing us. (I knew it!) In fact, they argue that the squeeze from high housing costs is primarily responsible for a British Thermal Truckload of bankruptcies over the last 25 years. Even the trend toward two-income families hasn’t saved the day because housing prices just keep on rising. In other words, for the last 25 years consumers have been making the same progress as their pet hamster has on his journey to the other side of the room. (I knew it!)
There are some Federal Reserve Chairman, of course, who would argue that all this housing price inflation is actually “building wealth,” and that this type of wealth building is as good for you as spinach and those fish oil pills that some spouses want you to take for $15 a bottle instead of spending that money on fishing necessities. To the Fed Chairman in question, I say “What does a 400% increase in bankruptcies say about your fancy wealth theory?
And later I learn, I’m right again. According to CNN/Money, cars are more expensive than they used to be, even inflation adjusted. (I knew it!) This also jives with my theory that pretty much everything is cheaper these days but stuff produced by monopolies or the government. You know, cheaper food, higher taxes, higher utility bills. Okay, so the car business is pretty darn competitive, but still, I knew it!
Here’s the scoop according to CNN: The 1965 Lincoln Continental had a sticker price of $6,166, about $36,000 in current dollars. There’s no perfectly comparable car, but they suggest comparing it to the Lexus LS-430 which has an MSRP of $55,700, before options. This jives with a Scott Burns article I read once (but refuse to re-read in case I’m wrong), where he found that a front engine Porche in the ‘70s cost about the same as a Volkswagon Bug today. Before scoffing, note that today’s Bug outperforms the '70s Porche, according to Burns. But a Porche is a Porche, of course, of course, and I can’t imagine what a new one of those must cost.
But before we all run out an join a consumer group and circulate a petition to cap the price of houses and German sports cars, we (as the Fed has yet to say) have only ourselves to blame. Okay, we can’t blame only ourselves because that would kill off an entire genre of cocktail party conversation. But get this: According to John De Graaf who helped to write "Affluenza: The All-consuming Epidemic" the savings rate actually fell in the ‘90s even as salaries were going up. (I knew it!) "We were making more money, but spending it even faster," he says. The economic term for such behavior, by the way, is “stupid.”
