JAMES PETHOKOUKIS: What Ben Nelson Didn’t Tell Nebraskans Last Night.
Archive for December, 2009
December 31, 2009
BRINGING TOGETHER TWO AMERICAS: JOHN EDWARDS’ WIFE MEETS HIS LOVE CHILD.
PRIORITIES: White House takes four days to respond to terror attack, but responds to Cheney criticism in matter of hours? Obviously, they’re more scared of Dick Cheney than of terrorists.
NICK GILLESPIE: Public Sector Drives Deep Into The Night. “There is a looming showdown in American society between public-sector employees and the rest of us, in terms of job security and, especially, unsustainable gold-plated retirement and health benefits that are working hard to bankrupt whole states such as California, New York, and New Jersey. As with some parts of the private sector (domestically owned auto companies, for instance), basic compensation packages were hammered into place in a very different America, and conferred massive future benefits when politicians were either too stupid or too cowardly to confront basic questions of fiscal responsibility. Do you want to spend your life (and have your kids spend their lives) to pay ever-increasing taxes for teacher, cop, and bureaucrat retirements at early ages? Especially while you’re expected to fully fund your own? This is a social contract that needs to be redrawn ASAP.”
It’s not a contract — those involve voluntary exchange — but it will be redrawn, one way or another.
AN AFTER-CHRISTMAS SALE on TV Shows On DVD.
MEGAN MCARDLE on buying vs. renting.
CLIVE CROOK: A Double Standard On Obama And Terrorism? “Well of course Republicans are playing politics–which is deplorable, and something that Democrats would never do. But in my circle–I mix with all kinds–it isn’t just Republicans who were incredulous at the still-growing catalogue of errors, and awe-struck by Janet Napolitano’s initial view that the system had worked.”
DICK CHENEY: MAN OF THE DECADE?
CARBON TAX STRUCK DOWN AS UNCONSTITUTIONAL: In France.
HOT AIR: Quotes Of The Day.
SCOTT BROWN winning the online battle?
The real question is, how’s he doing on donations?
OUR NEW “POST-MODERN RACE PROBLEM.” (Via Ann Althouse, who comments, “Steele writes an excellent essay — providing a great starting point for the self-examination that will be required of us in the years to come as we ask ourselves how this charming young man became President of the United States.”)
LIMBAUGH IN HOSPITAL WITH CHEST PAINS. In Hawaii. If I were Obama’s press guy, I’d set up a hospital visit.
A “GOVERNMENT-CAUSED DISASTER” — Fannie Mae and Freddie Mac’s role in the financial crisis. “When a private citizen like Bernie Madoff commits fraud, he gets a long jail sentence. But when Barney Frank, Nancy Pelosi, and the well-connected (and now rich) Democrats who headed Freddy Mac and Fannie Mae commit fraud, they simply send the bill to the taxpayers. Or, rather, the taxpayers’ children.”
THE MLA AND JEWISH LITERATURE: “English departments that would never allow themselves to be without experts in the literatures of many racial and ethnic groups in the United States don’t think twice about failing to have a knowledge base in American Jewish literature. Further, the view of many here is that discussions about multicultural literature that ought to include Jewish writers simply don’t.”
Plus this: “Jewishness has been associated with Israel, white privilege, colonialism and racism.” Just more of the way in which anti-semitism has been assimilated to “progressivism.”
A TERROR CRACKDOWN on bloggers? It would have been nice to see such keen interest in the sourcing of certain MSM terror stories, in prior years.
UPDATE: Xeni Jardin: “As soon as airlines and airports began implementing the directive — and that began before the bloggers posted their copies—the contents of the directive were no secret. So why the strong-arm tactics?” They’re sending a message, the way the Bush Administration didn’t with other leaks. . . .
SO HOW’S THAT BAILOUT GOING? Feds take over GMAC. “The federal government said Wednesday it will take a majority ownership stake in the troubled auto lender GMAC, providing another $3.8 billion in aid to the company, which has been unable to raise from private investors the money it needs to stanch its losses.” Bad money after . . . other bad money. But hey, it’s not their money, it’s yours, so what do they care?
UPDATE: A reader emails: “Ditech is a wholly owned subsidiary of GMAC – So now Fannie and Freddie have a blank check, what does that do for Ditech?”
ANOTHER UPDATE: And who was running GMAC? A guy with ties to Bernie Madoff.
SO AFTER MONEY TALK INVOLVING MEGAN MCARDLE AND DAVE RAMSEY, and advice from Toby Buckell, various readers have asked if I have any financial advice. Not really. Except, like Clint Eastwood says, that a man’s gotta know his limitations.
We don’t follow the Ramsey approach. It’s good for people who have debt problems, but we’ve never had those as we’ve avoided debt. My approach is tailored to my laziness, and lets savings be the control on spending. I decide how much money to save, and it goes into a money market account, automatically every month. The key is that this account is for money to go into, not to come out of, except for major purchases (like a house or car) or emergencies. I have a separate “slush fund” savings account that also gets an automatic deposit every month, and that gets hit up for routine unscheduled things like home and car repairs. Every once in a while I sweep money out of the “don’t touch” money market account into another account at a different bank that is inconvenient enough to access that I don’t take money out of it. (I guess that’s the “really don’t touch” account). At the end of the year, I look at the various account balances and know if I’ve saved as much as I planned; usually it turns out to be more, as I sometimes put unscheduled money — speaking fees, royalties, etc. — in there instead of the slush-fund savings account if I’m feeling flush.
This system turns my considerable sloth into an asset; savings is automatic, while spending takes effort. Taking money out of those “don’t touch” accounts is an event, meaning that I think about it before I do it, and thus don’t do it much. Likewise, almost the only credit card I use is American Express, which I pay off every month. You can stretch the payments, but, again, you have to make a conscious decision to do so, which means you have to think about it and realize how dumb it is, so I don’t. But the key is to prioritize saving first. Once I’m saving what I’ve planned to, I don’t have to worry about what I’m spending; it’s taken care of.
I was taught this “pay yourself first” approach in high school, and it seems to work. If you’re already deep in debt, then the Ramsey method is better. But if you’re like me — a fairly steady income punctuated with occasional unexpected “extra” money and, of course, occasional unscheduled expenses — it works pretty well, and requires fairly little thought. The Insta-Wife (with whom I am, happily, very compatible on this stuff) is a bit more OCD about things because she likes thinking about money and budgets, but her approach pretty much tracks this one too.
And that’s perhaps the best financial advice: Marry someone you’re financially compatible with. I seem to recall that The Millionaire Next Door had millionaires listing their spouses as one of the main reasons they wound up with money. I think that’s probably right.
UPDATE: Theodore Simon writes:
When it comes to saving, my wife and I are of like mind. During our marriage we have followed a strategy very similar to yours with one exception. Since money is fungible and can be removed from any bank, no matter how inconveniently located, we have always taken our “don’t touch money” and invested it in 20- and 30-year municipal bonds, which we have forced ourselves to hold to maturity. More recently we have invested in iBonds with the same idea in mind, which again serves to place our savings beyond the range of everyday temptations to spend. Some people might be surprised how much money you can save over four decades with that kind of discipline. Even with the meltdown of the economy in 2008, we are well off in our retirement, having enough savings to travel widely, cover our daily living expenses, pay for long-term health care insurance, and live comfortably in the way we had always intended.
Barring all but the worst personal catastrophes, the advice you gave really works. It certainly has worked for us.
Personally, I’m reluctant to tie up all my major savings in long-term fixed-income instruments, but then I’m younger. And the larger point holds. You can save a lot of money if you try, and on the other hand you can spend an amazing amount of money without really trying at all . . .
ANOTHER UPDATE: Reader Travis Blake writes: “Saw your post on Dave Ramsey – your approach sounds a lot like the method in the book linked below (The Wealthy Barber). I’m generally not fond of budgeting, but the ‘pay yourself first’ approach has served us reasonably well (although, for full disclosure, we have never done automatic savings).”
MORE: Reader William Manuel writes:
The pay yourself first strategy is great; the rest is awful. Let’s say you and your wife are mid 40’s. One of you is probably going to live to 90. Therefore, your investment time horizon is 50 years. Over any 10 year period, the probability of equity generating a greater real return than debt (bonds & money markets) is, I’m estimating, over 90%. Over a 50 year period, it is inevitable. Therefore, get your money out of the money market and into a broad market index. Even when you retire, your time horizon is still 20-30 years and suggests the majority of savings in equities.
Well, the post above is about saving, not investing, and in fact my retirement investments, etc., are mostly in equities. But in fact, stuff in money markets and CDs has done pretty well compared to stocks over the past decade — and, looking at my TIAA-CREF account, the small portion of my money in the fixed-income Traditional Fund did better over the past 20 years than the CREF Stock Fund, and I would have been better putting my money in CDs than in most of the mutual funds I’ve been in, which have all been highly-regarded blue-chip funds. Of course, this is a lousy market, and results would have looked different a couple of years ago (and if I were closer to retirement I would have gotten at least partly out of equities then). But honestly, though the long-term superiority of equities is something you hear about a lot, I’m not convinced that it’s so easy to realize in practice. Retrospectively you can always find stocks or funds that did really well, but spotting them prospectively is a lot harder.
UH OH: Pilots’ union: The system didn’t work after the attack either.
UPDATE: Ron Radosh: Will Obama Now Protect Us?
In last night’s remarks, President Barack Obama made another one of his late-in-the-game, 180 degree turnarounds. Not only did the system not work, as asserted by Robert Gibbs and Janet Napolitano after the Christmas Day incident aboard Flight 253, but now the President is calling it a “systemic failure” in our intelligence agency apparatus. No longer is it, as Obama said earlier, an “isolated incident” committed by the “alleged” terrorist.
The government, it is clear, knows that al-Qaeda was behind the attack, had information beforehand that someone from Nigeria would be involved, and had “warning signs” that were ignored. And just as before 9/11, intelligence agencies either did not share material some of them had with the other parts of the security apparatus. It also is now known that Umar Farouk Abdulmutallab had engaged in much activity that gave even his father cause to worry, as President Obama acknowledged.
Read the whole thing.
WELL, IT’S NOT LIKE HE’S A REPUBLICAN OR ANYTHING: Ellen Karis: Why Does Hollywood Keep Hiring Charlie Sheen?
REPORTING ANOTHER FLIGHT 253 ARREST, confirming a passenger report that had earlier been unconfirmed. But now they’re saying the second person was detained for “reasons unrelated to the attack.” Lots more coverage here.