Black Coffee: When Did They Stop Teaching Basic Economics in America?

It’s time to sit back, relax and enjoy a little joe

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…

Have you seen Oreo’s “Whisper Fight” television commercial? I can’t get enough of it. There are more laughs in that 30-second masterpiece than there were during all eight seasons and 192 episodes of “Full House.”

No, I haven’t watched every episode of “Full House” — but I watched enough of them to know that it was one of the lamest sitcoms ever created.

And before you write in to tell me that “Full House” was a hilarious laugh-a-minute riot — you better make sure you include an example of at least one genuinely funny scene to prove your point. Good luck. You’re going to need it.

Okay … onward and upward.

The Way-Back Machine: Past Posts Of Mine You May Have Missed

From August 2009:

What’s an Emphyteutic Lease (and Why You Should Avoid One) – Is your lease emphyteutic? You better hope not.

And Here’s Some Other Posts You Might Enjoy …

Control Your Cash - Why Car Salesmen Hate Dealing with Women

Wealth Pilgrim401k Matching – How to Get More for Less

PT MoneyWhy It May Cost You More When It’s Free

Wise DollarAn Easy Way to Save on Your Heating Bill

Credits and Debits

Credit: This week, in his State of the Union address, President Obama asked Congress to give minimum wage workers a 24% raise to $9 per hour. I remember the last time I got a 24% raise. Wait a minute … on second thought, that was a 2.4% raise.

Debit: If only somebody would tell the President that higher labor costs act as a drag on a weak economy. They also won’t lower the unemployment rate, which is still higher now than it was when he took office in 2009. I’m not sayin’. I’m just sayin’.

Debit: Uh oh. Don’t look now, but the United States’ lost its claim to being the world’s biggest trading nation. That’s right. China is the new trading king now, when measured by total imports and exports.

Debit: One store that’s familiar with Chinese exports is WalMart. Unfortunately for them, February is off to a really bad start; the retailer just experienced its worst monthly sales start for any month since 2006.

Debit: Then again, it’s not just WalMart that is suffering from a lack of customers. If January’s figures are any indication, retail growth in the US has been virtually non-existent this year for most everyone, as last month’s sales edged up just 0.1%.

Debit: Although American consumers’ enthusiasm is clearly on the wane, the US government eagerly continues to rack up charges on its national credit card. Since October, the US has added another $290 billion to the National Debt. I know.

Credit: Thankfully, the US actually managed to temporarily stop the fiscal bleeding last month — it ran a $2.9 billion surplus in January. That’s the first time the US ended a month in the black since last April.

Debit: Since 2009, the US has added more than $6 trillion to the National Debt. Even so, ex-Speaker of the House Nancy Pelosi (D-California) insists that the government doesn’t have a spending problem. Unbelievable.

Debit: Pelosi’s absurd economic mindset is quickly eroding foreigners’ faith in our resolve to live within our means — and that’s hastening the end of the US dollar’s bestowed honor of being the world’s reserve currency. When that honor is finally withdrawn, most Americans’ standard of living will drop precipitously.

Debit: Our politicians have to be either blind — or not paying attention — to not see the growing worldwide dissatisfaction with America’s abuse of its exorbitant reserve currency privilege. Then again, maybe they are aware, but simply don’t care.

Credit: The loss of faith in the US dollar is clearly reflected in the world’s central banks’ gold appetite. In fact, they bought more than 534 tons of the yellow metal last year — that’s the most since 1964. Collectively, central banks have been net gold accumulators for eight consecutive quarters.

Credit: The US dollar’s diminished standing isn’t limited to other nations. Last week the Virginia House of Delegates passed a bill authorizing a study on the merits of issuing its own currency. Just in case, of course.

Debit: Finally … Did you see this? Bourbon manufacturer Maker’s Mark found itself on the rocks after announcing they’re reducing the alcohol content of their whiskey by almost 7% in order to meet rising demand for their product.

Credit: Huh? Why would any reputable company water down their product to meet demand? What ever happened to the tried-and-true economic solution of raising prices — or shrinking the package?

Credit: Hut! Don’t say it. I know exactly what you’re thinking: Taco Bell better not try the same crazy stunt by reducing the beef content of their world famous taco meat. If they do, well … it’s on like Donkey Kong.

The Question of the Week

Sorry, there are no polls available at the moment.

By the Numbers – Contest Time: Win a $20 Starbucks Gift Card!

Yep, it’s contest time again! Below is a list of the Top 10 television series of 2002. I’ve got a $20 Starbucks gift card for the person who can correctly guess the only television series in the list that I watched regularly that season. That’s right — there’s only one!

Please place your answer in my blog’s comment section; I’ll only accept one answer per email address. If multiple folks pick the correct answer, then I’ll select the winner by a random draw among everybody who got it right.

And if nobody enters or gets the correct answer, then I’ll use the card myself.

The contest closes on Friday, February 22 at 5 pm, Pacific Standard Time. Good luck!

1. Friends (Nielsen rating: 15.3)

2. CSI (14.6)

3. E.R. (14.4)

4. Everybody Loves Raymond (12.8)

5. Law and Order (12.6)

6. Survivor (11.8)

7. NFL Monday Night Football (11.5)

8. West Wing (11.4)

9. Will & Grace (11.1)

10. Leap of Faith (11.0)

Source: TV by the Numbers

Other Useless News

Here are the top — and bottom — 5 Canadian provinces and territories in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:

1. Saskatchewan (2.06 pages/visit)
2. Newfoundland (2.05)
3. Alberta (1.95)
4. Manitoba (1.66)
5. British Columbia (1.65)

9.  Nova Scotia (1.47)
10. Prince Edward Island (1.38)
11. Northwest Territories (1.33)
12. New Brunswick (1.27)
13. Nunavut (1.00)

Whether you happen to enjoy what you’re reading (like the crazy canucks in Saskatchewan, eh) — or not (you hosers living on the frozen Nunavut tundra) — please don’t forget to:

1. Click on that “Like” button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!

2. Make sure you follow me on Twitter! And last, but not least…

3. Don’t forget to subscribe to my RSS feed too! Thank you. :-)

Letters, I Get Letters

Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not!

Kath stumbled upon my blog earlier this week and was so impressed (no, really) she sent me a nice note, which started out like this:

“I just found you … where have you been all my life???!”

Standing in line at the DMV.

I’m Len Penzo and I approved this message.



Comments

  1. 1

    says

    So you’re saying – the reaction to Maker’s Mark debasing their alcohol is similar to how people will eventually react to us debasing our money supply? I’ll drink (twice as much as last year) to that!

    • 2

      Len Penzo says

      Great observation, PK!

      (And next time you ask for a double, be sure to clarify that you really mean a double plus 7%.)

  2. 3

    Mike Phillips says

    Dear Mr. Romney (er, Len), I really sorry that you don’t think minimum wage earners don’t deserve any kind of a raise after all these years. I know it must be tough with all the money you make to look down your nose at those who are less well off than you and have to work hard just to try and get by. Oh by the way data has shown that raising the wage doesn’t really have that much effect on job hires. Typical Supply Side Talking points from you.

    • 4

      Len Penzo says

      Everyone “deserves” only what a free and unfettered market will bear for their product or services, Mike. I’m with the great economist Milton Friedman on this one: The minimum wage is actually an enemy of the poor. Keep in mind that prices would drop for everyone if we eliminated the minimum wage.

      http://www.youtube.com/watch?v=ca8Z__o52sk

      There is a name for the place where labor costs don’t “really have that much effect on job hires” (tell that to anyone who owns their own business), where government interference in the free market ensures that life is fair for everyone, and unlimited money printing and the resulting currency debasement and reduction in living standards are just a figment of everyone’s imagination. It’s the same place where you can magically triple everyone’s salary without any economic consequences and everyone ends up being three times better off. It’s called Utopia — the only problem is it doesn’t exist.

      I wish it worked that way in the real world, Mike, but it doesn’t.

    • 5

      Volfram says

      I’ve worked at places where minimum wage had an effect on hiring. I’ve worked at places where minimum wage had an effect on price of goods, on-floor laborers, hours assignments, and firing.

      And as a result, minimum wage also had an effect on the patronage of those places. Most are out of business now. The one place I’ve worked that hasn’t experienced a severe blow to business right after I left technically didn’t have me as an employee. He was paying me under the table.

  3. 7

    Jordon says

    Raises, should only be given when earned. Just because one is making minimum wage, doesn’t automatically give them the right and become entitled to more money. They need more skills, education, and experience, or perhaps, find another job, perhaps in a career field. Its hard? Yeah, of course its hard. Our economy is in the toilet, and forcing employers to pay more for a job they have valued at more than minimum is one more way the government toys with the once free market, which it hasn’t been in some time and we wonder why the job markets stink. Government’s pudgy fingers trying to squeeze it dry.

  4. 8

    says

    The only time I ever got a 24% payraise was when I quit a job and left for higher paying one somewhere else. Pelosi, I could go on for a long time about her politics, but I won’t I’ll just shut up now. And I guess I’ll go back to Jim Beam since Makers will probably still charge a premium for their watered down product. Don’t they know the basic law of supply and demand? If the demand is so high then they should raise the price! I would gladly pay more for it as long as it continues to be a quality product, I won’t pay a premium for junk bourbon! Thanks for the Mention Len!

    • 9

      Len Penzo says

      My pleasure, Jose.

      What’s funny is Jim Beam owns Maker’s Mark. With Maker’s Mark moving from a mid-grade to low-grade bourbon, I wonder if there is room for both within the same company now.

      • 10

        says

        I may just have to go back to a “Non-Bourbon bourbon” Jack Daniels has always been a nice sour mash whiskey, although JB Black is fairly decent as well. I think there will be room for both. I think Jim Beam has a fairly decent following that will stay loyal to it. Makers probably does as well. It will be interesting to see what pans out. By the way, is there an email I can use to mail you. I can’s seem to find a contact anywhere (probably me being a duh).

        • 11

          Len Penzo says

          JD is the Honeybee’s drink of choice, mixed with Diet Coke.

          Contact info is in the About section (I know, that doesn’t make sense, does it?). I also usually note it in the “Letters” section of Black Coffee, but I forgot to do that this week! Sorry.

          My email address is: Len@LenPenzo.com

  5. 13

    sewingirl says

    When the minimum wage went up the last time, my daughter was working at a party store. The owner had to lay off two workers. When you only have X dollars coming in, the payroll can’t take the hit. Can Obama guarantee a companys profits will go up enough to cover the extra payroll? Of course not!

  6. 17

    Volfram says

    When drinking milk, there’s no point in going half-way. I drink the fattiest stuff I can get my hands on.

    For a while, I’ve threatened to take some Whole and mix it with dairy creamer and drink that. I actually have tried straight dairy creamer. It’s kind of like drinking ice cream.

    If you’re cutting fat out, milk isn’t the best place to do it anyway. Apparently, calcium has an interesting effect in that it reduces the “potency” of fat digested while the calcium is present, so a glass of whole milk is less fattening than an equivalently-sized slab of lard.

    • 18

      Len Penzo says

      I’m with you, Volfram. I can’t drink milk now like I used to, but when I was a kid we always had whole milk in the fridge. Sometimes my dad would even bring home the really good stuff: “Extra Rich” milk. Remember that? It had a higher fat content than whole milk and it was heaven! I don’t think they sell extra rich milk anymore. At least I haven’t seen it in many many years.

      • 19

        Volfram says

        OH MAN, THEY ACTUALLY USED TO MAKE STUFF LIKE THAT!? That’s awesome!

        I think they stopped selling it before I was born, unfortunately.

        Bummer about not being able to drink milk like you used to. I go through a gallon a week, and any time my stomach starts acting up, a glass of milk fixes everything. Stuff’s amazing.

  7. 21

    says

    West Wing was the best show ever. If only your government could get itself together and come up with some solutions.

    Is this sequester another type of cliff? Why do your politicians need another break when there are so many problems waiting to be solved?

    -13 celsius in this part of Ontario this morning.

  8. 24

    Funancials says

    I think it’s a trick question…you didn’t watch any of the top 10 shows because you were too busy LOL’ing at Danny Tanner.

    I wonder if Barack will somehow find your article and realize that raising the minimum wage has more debits than credits? Lets hope so…

    Or maybe he knows that the $2 increase will lead to more unskilled workers losing their jobs, so they’ll require more government assistance, so the government will only get bigger with the increased dependency. Maybe he knows what he’s doing…

  9. 27

    says

    I my opinion the all time high was a show called “All in the family.” The honeymooners was not far behind, neither was Mash, Barney Miller and many of the 1960s and 70s shows.

    24% raise may be high but minimum wage should be raised nevertheless.

    • 28

      Volfram says

      In my past experience, raising minimum wage simply increases the proportion of employees who are paid minimum wage(fewer raises are handed out) and increases the unemployment rate(it’s harder to find a job, because you have to be WORTH what you’re getting paid).

  10. 33

    SassyMamaw says

    I’m going with Monday night football, Len.

    BTW, I saw today that Maker’s Mark got so many complaints they have decided not to change after all.

  11. 34

    Eric says

    Len, It’s awesome the way you get people to jump around, create site hits, and jack ad revenue. You’re a ….. no, not that …. A dude that figured out a way to get a bunch of people on his site to discuss, no, post a response / personal anectdotes on topic and feel involved, especially with the occasional personal response. Jeen- Yus. “What kind of gas do you put in your car …. Regular, Mid., Premium, Diesel?”; Milk? ….. Astro sign ….. “What’s your favorite weekend day, Sat. or Sun.?” “Whats your favorite planet you dont live on?” Yes, I’m jealous. Eric (that still loves In-N-Out)

    • 35

      Len Penzo says

      I see it worked on you! ;-)

      And isn’t that what a blog is all about? :-)

      (By the way, I haven’t asked the planet question yet, but thanks for the tip!)

    • 37

      Len Penzo says

      Good question … Let see what my Magic 8-Ball thinks.

      “Don’t count on it.”

      Uh oh. Looks like you may have picked the wrong show, Eric!

  12. 40

    deRuiter says

    Dear Mike Phillips and Doable Finance, If raising the minimum wage improves conditions for minimum wage earners and doesn’t hurt the economy as you claim, then let’s raise the minimum wage to $50. per hour and wipe out poverty while we are at it. Why be a piker at $9. and pat yourself on the back for “doing good for the poor” when you can raise the minimum to $50. and solve the poverty crisis. Heck, let’s raise the minimum wage to $100./ hour and make America prosperous again! Sadly raising the minimum wage hurts workers and industry, because when the minimum wage is raised, the least productive, who might benefit from on the job training by working (Show up on time, be enthusiastic, don’t fool around on the job, take a shower before you come to work, wear neat, clean clothing to the job, learn to get along with the other workers, to work as a team, let me show you how to operate that machine) are the first to be booted from the labor force. Also there are several reasons so many manufacturing jobs are being taken by robots. They don’t get sick, they don’t get drunk and show up at work hung over, they don’t join unions and jack up wages, they don’t demand rest breaks, lunch or paid vacations. Keep raising the minimum wage, watch more jobs be taken over by machines or outsourced to India and Pakistan.

  13. 41

    Daryl Bowling says

    hey shot in the dark but based on the way you write, i think CSI because it gets into technical stuff and you like to dig into stuff.

  14. 42

    laura says

    1. Friends? Say it ain’t so.
    **2. CSI. Season 2? Not were I thought I’d place my vote, but I think Grissom and Co. had you glued to the couch.
    3. E.R.? No Clooney. No Marguiles. No point.
    4. Everybody Loves Raymond? No. It’s Ray Romano. Even Doris Roberts couldn’t make this better.
    5. Law and Order? No. Too many cast changes made it hard to stay invested.
    6. Survivor? Not something anyone should be interested in.
    7. NFL Monday Night Football? No. Real hockey fans don’t watch football.
    8. West Wing. I thought this would get my vote. Political commentary, and witty repartee, what could be better? Quite frankly, not much, except Grissom and Co. See number 2.
    9. Will & Grace? No. Just, no.
    10. Leap of Faith? No. This only made the list because it followed Friends.

  15. 44

    Grunt says

    Well played today, Len! I never had issues with raising the minimum wage, but you make a good point. (Re: Milton Friedman)

    I think they’re making Maker’s Mark weaker so you’re not as drunk when you finally make it to the front of the DMV line. ;-)

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