Monday, December 31, 2012

Deal Within Sight?

CNN is reporting that a deal on the fiscal cliff fiasco is in sight.  While this may be in time to create the instantaneous contraction of the economy, it's not fast enough to prevent all damage to the economy.  A quick look at the Dow Jones for the past 5 days:
Generally, this shouldn't look like a mountain range 
While I don't like to equate individual stock prices directly to the health of the overall economy, I think it does show that business investors are worried about what is going to happen without a deal.  What I do see when I look at this graph is swings in confidence and general uncertainty.  However, if there was another economy in the world more promising, and more certain investment prospects, I think you would have seen steeper dives.  The question for most investors is, if not American companies, then what?  There's only so much land and gold to hoard, and if the entire global economy contracts, who can rent the land or buy the gold? 

Hoping that a deal comes sooner rather than later... and that we stop this nonsense and never do this again.

Sunday, December 30, 2012

Conflict of Interest

For the Bears to go to the playoffs, the Vikings must lose.
For the Vikings to lose, the Packers must win.

Most people would conclude that Bears fans should root for the Packers.
Most people would be wrong.
No real Bears fan would ever root for the Packers.

What's a Couple Hundred Thousand Dollars?

In the interest of full disclosure, my own personal household's cash flow is dependent on government spending.  Between my subsidized student loans from the Department of Education, and my husband's research grants from the Department of State, and the VA programs that mean that I can ship my dad off to a home when he goes fully senile (thank you for your service, Dad), going over the fiscal cliff is going to be very, very, very, very bad for me personally.  No more loans, no more income, and no possible help from the Bank of Dad who now might have to provide for his own long-term health care.  In short, homelessness and starvation await. And, with no housing subsidies or food stamps that normally pick up the slack in these times, we're royally screwed.  That's just me.  And, no, my situation would not have been better if we had stayed in Indiana (my income was heavily dependent on federal spending).  If you know any students, retired folk, military members, and anyone who works in education, manufacturing, construction, healthcare, social services, or... well... anyone who sells anything to people who work in these sectors, there's a good chance that going over the fiscal cliff is going to be disasterous.

With so much at stake, Congress really needs to come up with a deal.  Like now.  Decreases in government spending will decrease the overall spending of the economy, thereby contracting the GDP of the United States.  With less government spending, private firms and individuals will have less money to spend (if you don't buy that helicopter, then there is a factory that no longer has to employ people to build that helicopter), which means that fewer transactions will take place on which income and sales tax can be charged.  Decreased spending will then lead to decreased revenues, requiring further reductions of spending, or increases in tax rates.  Neither is a good idea for growing an economy, leading me to wonder what economic training Grover Norquist actually received.  Not that Norquist is really paid to advocate for sound economic policy, but rather is paid to lobby for decreased tax rates. 

This brings me to my main question: Why is the current hold up about whether taxes should be raised for everyone making above $250,000, $400,000, or $1M?  What do these sums have to do with anything? 

Chosen just to remind me of this scene?
What I find the most troubling thing is that Congress is hung up on which ad hoc level to set.  There appears to be a complete disconnect from reality with these numbers.  Congress could actually tie this to some measure that has real bearing on the economy.  A multiple of the poverty line, based in real dollars that slides based on the number of members of the family.  If one would set this at 10 times the federal poverty line, then an individual does not see tax increases until (s)he earns $111,700 per year.  A family of four sees an increase at $230,050.  If you use the Census Poverty Threshhold, you get slightly different figures ($114,840 and $228,110 if the family of four is two adults and two kids), but still in the same ballpark.  Both methods would tie tax increases to some measure of real poverty and how much money is actually needed to provide for the basic needs of the population, or satisfiy the goal of shifting the tax burden to those who can afford it.  It takes away the method of trying to figure out which figure sounds rich and which is middle class.

But, what is a middle class income?  The answer is none of the above  Median household income for the United States was $50,054 in 2011.  That's one fifth of the smallest number that is being talked about, one twentieth of the $1M figure.  Even taking 10 times the poverty level of the US doesn't get us close to this figure.  If a solution should look at taxing the wealthiest households, then a multiplier of the median household income should be considered, be it 3 times or 5 times the national median.

What Congress should not be doing is throwing out these arbitrary numbers and think that sound policy is being produced.  Nothing about the fiscal cliff has been about the creation of sound public policy.

Sunday, December 2, 2012

Sexualized Legos

I had the wonderful opportunity to spend Thanksgiving with a dear friend and her five children.  The five children is the reason that I had not seen her in the Midwest lately (they don't tend to travel much), and the previous distances between her home on the East Coast and the Heartland were too great for me to travel to see her.  Now, since a weekend to travel home to Chicago was too much, I gladly accepted an invitation to meet the newborn and gorge myself on food.

Her 9, 8, and 6 year old children appear to be obsessed with Legos.  The oldest boys walked us through all the characters of the Lego Star Wars universe.  Meanwhile, the oldest girl introduced us to Lego Friends, Legos for girls.  Legos for girls?  Legos are gender-specific?  When did this happen?

I have issues with targeted girl and boy products, especially where there does not appear to be any type of need.  Legos can have male figures and female figures, but really... building blocks being targeted to boys and girls differently?  I'm still skeptical, but what I could not discount was how a 6-year-old girl had responded to a purple and pink playset.  I remember having wanted a Barbie at that age, and the political debate that this caused between my parents about gender stereotypes and which message should be given to me.  I didn't care.  I wanted the glamour Barbie with the Dream House and the car that my friends all had.  Instead, I had Day-to-Night Barbie who had an office and a studio apartment - corporate drone Barbie.  None of my friends wanted to play with my Barbie, and I somehow felt left out.  It's hard to be six.

With my own personal biases on the back burner, I thought I might get a couple of the Lego Friends figures as part of a holiday care package for the kids.  I quick look at what's available at Target left me with a more startling view of the toys.  Knowing that this is going to a household where both the boys and girls are taught to dress modestly, I realized that purchasing these toys could be offensive to the household's sensibilities.  Every one of the girl figures is wearing a short skirt, low cut tank top, or both.  Meanwhile the "Boy" oriented products have fully clothed characters, with the main difference between girls and boys being hair length. 

I can understand that having pink and purple colored bricks might be appealing, mainly because you can never have too many different types of bricks.  However, to create a specific "girl" line of Legos, dress them provocatively, and then market them to 6-year-olds?  That's just not right.