So the Republicans want to threaten a filibuster on the stimulus package. Why not let them?

Let's get real: Democrats are riding high on election wins, people want the stimulus, and they are pretty much anti-Republican still after eight years of Bush. So let's call their bluff and make them filibuster the bill if they want to stop it.

That's exactly what the American people would loathe to see: Republicans grinding government to a halt, reading the phone book into the record, while thousands lose their jobs. If they played it right, the Democrats could look like the saviors of the economy while the Republicans stand in the doorway, blocking help for poor people. Yeah, that's the image the Republicans want to put forward.

Unfortunately Harry Reid doesn't seem to have a pair and would never force the Republicans to actually carry a cookbook up to the dais. If he did this would be easier. Eventually the Republican support would crack, and since it only takes two Senators in states where they have a 50% chance of losing next election (see Arlen Specter [R-PA]) the Republican caucus will crumble in about a day and a half.

My message: call their bluff, Senator Reid. Make them do it. Let them grind the government to a halt and embarrass themselves. You have everything to gain and nothing to lose.

10:36 am | Comment (2) | Print | Categories: Economics, Politics

The FDIC criticized banks today for fee policies that prey on the young and low-income. No longer content to simply hold your deposit as a revenue-generator, banks are looking more than ever at their deposit accounts as fee-generating revenue enhancers, and they're targeting the group most likely to do things like overdraw: those who are poor and those who are just starting out.

Though I have only overdrawn one time in life (in South Korea after making an exchange rate error with some four hours sleep), I side with the FDIC in that some of these practices are exceptionally shady. In particular, one shady practice is when banks reorder transactions not in the order they are received by the bank, but in the order of the largest transaction to the smallest, thus generating extra overdrafts for themselves.

For example, imagine you begin the day with $1,225.00 and you spend $3.75 on coffee at Starbucks, $26 on gasoline, $79 on cable TV, $32 on dinner and $1,130 on rent (since checks are presented at the end of the day). If processed in the order in which the transactions took place, your rent check would overdraw your account by $45.75 and generating $29.00 for the bank in overdraft fees. However, if you place the transactions in the order of largest to smallest you actually overdraft after dinner, incurring three overdrafts for a total of $87.00 and the most expensive latte you've ever had in your life.

These fees hit young and poor customers because they are most likely to have small amounts, which are detrimental to the bank (since it likes large, stable amounts to fund its lending department). Still, though, these customers need bank accounts, and these fees are helping drive them deeper and deeper into debt, especially if they're on fixed incomes (e.g. Social Security recipients).

The government should end this practice, or limit the number of overdraft fees per day, to protect consumers and ensure that banks try focusing their mathematics efforts on their balance sheets where they belong.

11:17 pm | Comment (0) | Print | Categories: Economics

All around the country people are nervously holding their collective breath, hoping that there's no "next shoe" in the economic slowdown. In Washington, the talk is about cautious optimism that Federal budgets are not slashed, and that interest groups continue spending. But so far, Washington has been spared the horrific economic storm.

Why?

For the last six months, that answer could be attributed to the election. Most entities were spending or had committed their spending for the election cycle far before the downturn cut into budgets. For candidates and issues using Washington firms, their fundraising largely survived because of the point in time the downturn came about.

But I also believe that Washington (or at least the part of Washington I work for) is insulated based on what it does. We don't generally serve large companies that are subject to the whims of consumer spending. Instead, the majority of my work is focused on interest groups, corporate law firms, Federal compliance issues and the like.

Interest groups are going to be impacted but will still focus on the web as a means of inexpensively getting their message out. So there is no great decline there.

Law firms and corporations that wish to influence policy will continue spending, as it is almost a necessity. They cannot halt lobbying on, say, energy reform, for fear that it will pass before the economy comes back and they'll be left out.

If we served small shops or, say, carmakers, we could possibly face a downturn. But I think the larger Washington technology community will weather the storm. The largest part of our focus is on those groups who either want to get their tasks accomplished regardless of the economy. They will spend less to be sure, but will not halt spending entirely; I believe this will largely protect Washington from the onslaught of the economic downturn.

10:12 am | Comment (0) | Print | Categories: Economics

Wow. It's been an exciting week for my money.

First, I had the fun of knowing that I was an asset, and was now pwned (Google it, spelling freaks) by Citibank.

Then, I come to find out this morning that Whoopsie! When they said Citibank, Wachovia meant to say "Wells Fargo." The two names sound alike, so I'm sure it was a coincidence.

Fifty bucks says that Citi will sue Wachovia to enforce the original agreement and they'll be locked into litigation that's expensive and uses...you guessed it...my money.

Oh, Bank of America, you never looked quite so sweet...

2:03 pm | Comment (0) | Print | Categories: Bizarre, Economics

The automobile industry is going to press Congress for $50 billion in loans. The automakers insist that the loans are necessary, with high fuel prices and low demand for profitable SUVs and trucks eating profits and running up huge losses.

In an election year, it will be hard for Congress to say no to protecting American jobs and innovating right here.

But saying no is exactly what Congress should do.

The American automobile industry is famous for claiming market principles should drive the auto industry when Congress tries to increase fuel efficiency or safety standards. And this is not the first bailout of the American auto industry that taxpayers have funded.

The truth is that the market is doing what the market does - killing old industries and rewarding new ones. American automobile manufacturing has been in decline for years. The truth is that the Europeans and the Asians are much better at producing cars than we are.

The human face of these industry losses are the people who find themselves unemployed. Congress should spend the $50 billion in training, business investment, and other aid, rather than pouring it into an industry that will eventually fail.

When automakers from Detroit tell Congress that we're "shipping American jobs overseas" they should be quietly reminded that Toyota produces many if not most of the vehicles it sells in America, in America. So does Honda, Hyundai, and others. VW produces its cars in North America, primarily in Mexico. They should also be reminded that Ford Motor Company, which will make such a claim, produces most of its parts in Mexico, then ships them to Detroit for assembly. For Asian car makers, manufacturing the cars here is cheaper than shipping them overseas, and good, high-paying American jobs come from these investments.

Ford may have invented the assembly line, but his Japanese and European competitors invented better automobiles. That's how markets work. Propping up a failing industry will only prolong the inevitable, cost the taxpayers billions, and do nothing to encourage innovation. It may be unpopular to say no in an election year, but it is right.

Auto industry to press Congress for $50B in loans ~ AP, 9/7/2008

1:20 pm | Comment (0) | Print | Categories: Economics, Politics, Washington, DC

With so much hay being made nationally about the housing market, how's the DC market doing? Are we doing well, or are we stumbling a little bit? I took a look and wanted to share some of the surprising statistics I discovered.

The information I'm sharing reflects data for single-family homes in the District of Columbia ONLY and does not reflect condominiums or other properties in the greater DC Metro area.

4:52 pm | Comment (2) | Print | Categories: Economics

As gasoline prices rise, a number of employers are giving employees the option of engaging in four ten-hour days instead of five eight-hour days. The goal is to reduce the overall cost of commuting by reducing the commute. I like the idea.

In fact, with such an emphasis on work-life balance, I'm not entirely sure why more companies don't embrace the four-day workweek overall (though according to the Washington Post, they are). There may also be benefits for employers - freeing office space, increased efficiency (I calculated that my efficiency would be increased 5.8% if I were to engage in a 4-day workweek), and happier employees who liked the perk of a day off that their friends didn't get.

Still, a ten-hour workday presents a challenge, as it means a typical employee would work from 8 AM to 7 PM (assuming a 1-hour lunch break) four days a week. Since most evening events start at 7 PM, this either means missing those events or starting work earlier. Not potentially family-friendly to some parents.

As fuel prices continue to rise, we'll have to see how companies respond, with either adjusted working schedules or more telecommuting positions. It's an interesting proposition, to be sure.

8:38 pm | Comment (0) | Print | Categories: Economics

Republicans are against tax cuts increases. Everyone knows that. But Republicans can't stand against lower gasoline prices. That would certainly fly in the face of public opinion.

That's why Congress needs to pass a law capping the price of gasoline.

I'm not much in favor of subsidizing oil or of price controls. Both don't solve our dependence on it. But putting a cap of $2.50 per gallon for wholesale and $3.00 per gallon retail would do the equivalent of tax the industry by causing them to sell their product at a loss (thus erasing their profitability).

Next, the bill should make it a crime to speculate on commodities essential to American economics or national security, including oil, gold, iron, steel and coal. It should make the penalty seizure and dissolution of all assets by speculators in those markets if the assets have not been liquidated within 90 days. It should also make the capital gains tax for speculators 150% of the profits earned, starting 15 days after the law is enacted, to help spur the sale of oil speculators' shares.

The law should also mandate that for every dollar spent on highway construction, $2 must be spent on mass transit construction. For every dollar spent on maintaining a highway, $2 must be spent on maintaining mass transit systems. In addition, the law should require that for every $1 spent on highway construction or maintenance, the state who has the highway built or maintained must allocate $1 of its own tax revenues for investment in alternative energy vehicles.

Finally, it should order the Strategic Petroleum Reserve to make available any and all oil required to prevent shortages in the United States of oil-based products.

This law should stipulate that the price cap remains in effect for no more than six months, or until oil reaches $80 per barrel, whichever comes first. It should also mandate that the law can be put back into full force upon gasoline prices reaching $3.25 per gallon, up to five years after the law is enacted (to prevent oil companies from letting prices fall so they can keep gouging consumers).

This bill won't actually become law. But it will put Republicans on the wrong side of every important issue - the economy, gas prices, alternative energy, and sticking it to Big Oil. Is it a bad bill? Probably. But it's gutsy, and it might spark a new round of national debates on the topics of renewable energy, transit construction, and reducing oil prices. Talking about the same old ideas won't get the Democrats into the White House - and it won't solve America's dependency on foreign oil either.

8:20 am | Comment (2) | Print | Categories: Economics, Frustration

Do you see something wrong with record profits for oil companies and record prices for gasoline?

The Republican Party doesn't.

They filibustered a bill today that would have raised taxes on windfall profits earned by the oil companies and allowed the Securities and Exchange Commission to reign in speculation in the oil markets. For some reason, Republicans thought that targeting speculation, which has been seen widely as the overall cause of increasing oil prices, was a bad thing. Probably because the speculators donate to Republicans.

Tax increases probably weren't the right idea, and history has shown higher taxes do get passed on to consumers. What is so mind-boggling though is that Republicans didn't simply vote against the bill - they voted against DEBATE of the bill. They were opposed to even TALKING about it. Rather than work together to find something to help American consumers, they were more interested in protecting their campaign war chests and special interests, and refused to even discuss this bill.

This is really shameful behavior. The concepts of free speech and free assembly were based on the idea that a free public discourse would ensure a free society. But Congress can't seem to ensure that same free discourse inside the chambers of democracy, and that's disconcerting. And it's a good reason for Americans to vote these people out of power.

Maybe that's why Republicans are so worried.

1:50 pm | Comment (1) | Print | Categories: Economics, Election '08, Frustration, Washington, DC

Memorial day is upon us, and so I wanted to warm the weekend up with a bit on transportation.

The headlines that affect you...

• Gas hits $3.83 a gallon. Go ahead. You can cry. Let it out. I'll wait. It's important to get it out now. Seriously. Now that we've got that out of the way...
• 37.87 million of you will take to the roads or skies, which surprisingly is fewer than last year. Apparently $3.83 a gallon hurts some, but 37.87 million still feel the need to travel.
• If you must travel, Metro is getting safer, as they are preparing evacuation plans for all their stations in case of emergency. One has to think, though...why don't they already have emergency evacuation plans?
• American Airlines wants $15 for you to check your first piece of luggage. Though most airlines are struggling, Southwest is still flying cheep fares, in part due to their huge capital resources and ability to buy fuel far in advance. While some of my friends think that airlines should still serve diamond-encrusted champagne on flights, the reality is that the Southwest business model may be the wave of the future. Goodbye, Skymiles, hello Rapid Rewards!

9:55 am | Comment (3) | Print | Categories: Economics, Frustration, Metro, Travel, Washington, DC

Highlights since March 1st - enjoy!

1. The worst plan. Ever. Why charging tolls to drive in the city is a bad idea.
2. Cheap Eats Food for $5 per serving? It's possible even with rising prices.
3. The Death of Customer Service Good customer service is hard to come by these days. An experience worth reading.
4. Obama Wins Texas! Maybe? Sort of... Not really? A look at the Texas "primus" (primary + caucus).
5. Mac Secrets A look at exciting new software from the makers of Quicksilver.

1:03 pm | Comment (0) | Print | Categories: Apple, Blog Roundup, Business, Economics, Election '08, Maryland, Northern Virginia, Pet Peeves, Politics, Technology, Traffic, Travel

Hot dog stands in Washington, D.C. (Photo by: Kevin Clark - Washington Post)

9:35 am | Comment (1) | Print | Categories: Economics, Washington, DC

As I've worked to start saving money and padding my emergency fund (along with my stock portfolio), I've been watching the money I spend very closely, especially with regards to groceries. Recently I've challenged myself to purchase fresh meals that are no more than $5 per person (so $10 for two, $15 for three, etc.). So far, I've been successful, and even had some pretty amazing dishes (like salmon last night for $6 a serving $4.78 a serving).

I have a feeling that with grain prices and transportation costs increasing, that food prices will subsequently rise over the coming months, making it more difficult to purchase inexpensive meals. Still with sales and careful shopping, I will be successful. I was even able to get a meal at Whole Foods for $4.95 per serving (an accomplishment from what is a notoriously expensive store).

What's your favorite grocery shopping save-money-now tip? Tell me in the comments.

Updated at 3/9/2008 @ 8:28 pm: After further review of the receipt, I have determined that the salmon was less expensive than I initially thought.

9:00 pm | Comment (5) | Print | Categories: Economics, Washington, DC

As the Federal Reserve considers whether or not to cut interest rates again today, there's not all doom and gloom as a result. For me, and thousands of other students who have yet to consolidate their student loans, the move represents a blessing. But for millions of others (including my mother), thanks to Republicans in Congress, they won't see a penny of relief.
Continue Reading...

10:21 am | Comment (1) | Print | Categories: Economics

Yahoo is best known for search but also provides the backbone for thousands (40,000 to be exact) businesses that utilize their tools to process transactions and host online stores. Entrepenuers pay Yahoo to provide business services that take much of the guesswork out of running a small business. Yesterday, that system fell apart.
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3:45 pm | Comment (0) | Print | Categories: Economics, Technology

With oil's seeming unstoppable march forward, many of you (my friends) have asked me about what it means to the global economy and to our economy in particular. I am writing this as a hopeful way to avoid the questions that I receive and to provide a clear example of exactly why the economy is in its current state of affairs.
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9:59 pm | Comment (0) | Print | Categories: Economics, Politics, Washington, DC