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 whats been going on in the world of money and personal finance. Heres what caught my attention over the past week
Don’t forget that Daylight Savings time goes back into effect here in the US on Sunday, March 13th, at 2:00 a.m.
I love Daylight Savings Time. In fact, I really don’t understand why we don’t just keep it all year round.
The only thing I don’t like about it is the loss of an hour from my weekend every springtime. Why couldn’t they make the transition on a Monday morning at, say, 11:00 a.m.? That would bring lunchtime an hour sooner and shorten the workday by an hour.
Hey, I think I’m going to write my Congressman! Okay, on to business…
Blogs I’ve Been Following This Week
Live Richly – Advice to My 18 Year Old Self. I think Jennifer’s post was an absolutely brilliant idea. So much so that after reading it I immediately started writing a letter to my 18 year-old self. But two paragraphs into my letter, I suddenly remembered that as a teenager I thought I was so much smarter than everybody else that the 18 year-old me probably wouldn’t listen to any advice I gave myself anyway.
Budgeting in the Fun Stuff – Keeping Kids Involved in the Family Finances. Speaking of kids, I constantly keep my kids involved in the family finances by reminding them everyday how much money I don’t have to give them. Guest writer Shane, from Beating Broke, recommends a better approach. He says involving the kids in anything we do is an effective teacher because, “Theyll learn how to do things for themselves and are more likely to grow up to be healthy individuals.” Great point! So I’ve contracted my 11 year-old daughter Nina to completely gut and remodel our master bathroom this summer.
Money Help for Christians – Are Kids the Victims or Victors in Frugal Homes? Although most kids will claim the former, the undisputed truth is they’re the latter.
Thousandaire – High School Kids Should Have Jobs. Says Kevin: “Do you know what high school guys do in the summer when they dont have a job? They play videos games and fart.” I think that sums it up pretty nicely. Although, to tell you the truth, for most of us guys old enough to buy a beer, the latter part doesn’t change whether we have a job or not.
And Here’s Some Other Posts You Might Enjoy…
Wall Street Journal – A Union Education. (Point.)
Washington Post – The Wisconsin Union Fight Is About Labor’s Influence. (Counterpoint.)
Invest It Wisely – Bit Coin: The Digital Currency of the Future
Bargaineering – Have You Ever Bribed Someone?
Sustainable Life Blog – Did You Ever Wonder Where It Went?
Darwin’s Money – Correlation of Asset Classes
Doable Finance – Climb Up the Ditch of Debt
Everyday Tips and Thoughts – Planning, Preparing and Diversifying
Sustainable Personal Finance – How to Stop Smoking Cigarettes
First Gen American – A Tour of Babci’s House
Afford Anything – Your House is a Lousy Investment (No offense to Babci’s house, I’m sure.)
The Way-Back Machine: Past Posts Of Mine You May Have Missed
From January 2009:
Got a Fixed Rate Mortgage? Root for High Inflation. – For 12 years I faithfully worked to pay down my mortgage early — for awhile I was making the equivalent of two or three full extra payments a year. But as the nation’s debt started to spiral out of control, I began to question that strategy. This post outlines my thought process back in early 2009 and my eventual decision.
Last Week’s Winners — And Two More Tax Prep Software Promo Codes to Give Away!
Congratulations to Roberta, Janice, and Michele for winning complementary copies of H&R Block’s online tax preparation software, H&R Block At Home!
I have two more promotional codes to give away this weekend! The codes are valued at $55 which should also cover any sales tax. If you’d like a copy, simply drop me an email by the end of the day on Monday, March 14th, 2011 at Len@LenPenzo.com and let me know you’re interested in trying it out. I’ll then randomly draw the winners from all the entries on Tuesday.
Credits and Debits
Debit: The federal government posted a deficit of $223 billion for the month of February. That’s the largest monthly U.S. deficit in history. Annualized, that would represent a deficit of over $2.6 trillion for the 2011 fiscal year.
Debit: Before they were swept out of Congress, the last official budget submitted by the Republicans in 2006 resulted in a deficit of only $161 billion — for the entire 2007 fiscal year. Just sayin.
Debit: Those of you who continue to say that these ridiculously enormous deficits won’t hurt us clearly do not understand what is at stake here. It’s not hyperbole when I say if we don’t turn things around immediately, we are talking about a very real risk of economic collapse via hyperinflation and then a complete breakdown of our society.
Debit: In other news, with gasoline over $4.00 per gallon at many places here in California, I see speculators are banking on oil prices reaching $200 per barrel by June. At their highest point during the last run-up, oil cost about $148 per barrel. Hold on, we could be in for a heck of a ride this summer.
Debit: As the Heritage Foundation reminds us, high oil prices will spread the economic pain well beyond the gas station.
Debit: For its part, the US Department of Energy is now predicting that households will spend an average $700 more on gasoline in 2011 than it did the year before.
Credit: If you ask me, it sounds like it’s a great time for Washington speed up the approval process for resuming drilling in the Gulf of Mexico.
Credit: There is no joy in the Wisconsin’s public employee union halls today. That’s because a law was signed by the Wisconsin governor that increases union public employee contributions to their pensions and healthcare, and also limits the union’s collective bargaining privileges.
Credit: Adding insult to injury, I see the Milwaukee teachers’ union also dropped their lawsuit seeking reinstatement of their taxpayer-provided Viagra. There was no word on why the union finally decided to, er, soften their position. (I know. That was way too easy.)
By the Numbers
Unions, by the numbers:
7 Percentage of the American workforce that belonged to a private sector union in 2010.
10 Percentage of the entire American workforce that is currently unionized. (In 1983, it was 20 percent.)
36 Percentage of public sector employees who belong to a union.
24 Percentage of workforce in New York that is unionized. Two million employees in all; that’s the highest unionization rate of any state.
3 Percentage of unionized employees in the state with the smallest union workforce (North Carolina).
6 States that are home to almost half of the nation’s 14.7 million union employees. (California, New York, Illinois, Pennsylvania, Ohio, and New Jersey)
10,000 Dollars spent by the town of Orange, Connecticut, fighting a union grievance demanding that the city reinstate “Dress-down Fridays” and free, taxpayer-provided, coffee and milk to its union employees. The city lost.
75 According to Gallup, the percentage of Americans that approved of unions back in 1957. (14 percent disapproved.)
52 According to a 2010 Gallup poll, the percentage of Americans that approve of unions. (41 percent disapprove.)
Other Useless News
It’s been awhile since I checked out how Len Penzo dot Com is faring across America, so here are the 5 states whose readers spent the least amount of time here over the past month. Of course, in each case I’m sure there’s a logical explanation why they didn’t stop by as often as my most loyal friends in Mississippi did:
1. Nevada (They were probably too busy gambling.)
2. West Virginia (I assume there’s no Internet service in coal mines.)
3. Maine (Obviously getting ready for Lobsterfest.)
4. Louisiana (Maybe they’re getting ready for Crawdadfest?)
5. Michigan (They’re probably still mad that I declared them the proud owners of the worst US state quarter.)
Here’s another friendly reminder for ya: if you happen to enjoy what you’re reading – or not – please make sure you follow me on Twitter. And, if you’ll be so kind, don’t forget to subscribe to my RSS feed too! ๐
Letters, I Get Letters
I’ll feature the most interesting question or comment I get each week here on Black Coffee assuming I get one, that is. If you’re lucky enough to be the only question in the mailbag I’ll highlight your letter, whether it’s interesting or not. ๐
Carnival News
This week I had articles featured at the following carnivals:
Carnival of Personal Finance @ Fabulously Broke In the City (Editor’s Pick — Hooray!)
The Yakezie Carnival @ The Millionaire Nurse Blog
I’m Len Penzo and I approved this message.
Thanks for mentioning me in this great roundup, Len!
P.S. I see a lot mentioned here about unions. ๐ I think a union is perfectly fine if people are agreeing to it and contracts aren’t forced on anybody. The employer should be free to hire outside the union and the union should be free to not get beat up by corporate goons. In the end the union is limited anyways since notwithstanding government bailouts, they can only demand so much without placing their own jobs in peril. The consumer that ultimately pays their bills has a choice. If the product is crappy or too expensive they can always shop elsewhere.
Public sector unions, on the other hand, are a different matter! In that case the taxpayer is completely screwed since the law is usually such that there is only one union, and only one monopoly provider of whichever service they are part of. The fact that we can’t vote with our dollars like we can as consumers of private products is what makes them so godawful. It’s the same story with them up here in Canada as it is south of the border, stratospherically rising salaries and services that stay stagnant or decline.
I agree with you. I don’t have an issue with private unions as there is some semblance of a push/pull dynamic between the corporation and unions. If a private union pushes too far, they can bankrupt their corporation. Or the corporation can simply choose to pack up and leave to a right-to-work state or, as a last resort, move overseas to stay competitive.
But public unions are a completely different story for some of the reasons you mention.
To paraphrase the WSJ, a public union has a natural monopoly over government services and that gives them huge leverage over elected politicians. When public unions use mandatory dues extracted from its members to elect politicians who determine their salaries and pensions, that is a blatant conflict of interest.
In the end, the taxpayers have no one to represent their interests come bargaining time — as can be seen by these lavish government pensions and salaries that are higher than the private sector. That is essentially a form of corruption.
Even union champions FDR and AFL-CIO president George Meany recognized the folly of public employee unions.
After all, a state or city cannot pack up and leave if the public employees union demands get too extravagant — but they can always raise taxes.
Thanks for the mention here!
Mrs. SPF and I are both part of a union. Sorry IIW – our salaries don’t even meet inflation in the ON govt and our next CBA will likely see a wage freeze for 3 years while the govt gives corporations more and more tax cuts. In my 8 years in govt i’ve never had a raise more than 2% which means my salary has decreased over time when compared to inflation.
You’re very welcome! ๐
The private sector is struggling too here.
I mean this respectfully, has your union considered decertifying itself? I suspect the best-performing members would be much better served representing themselves as we do in the private sector. ๐
Corporate tax cuts are a good thing! I know it’s counter-intuitive, it is an undeniable fact that tax cuts bring in more revenue to government coffers than tax increases, because the resulting money that’s saved by the corporations is used to invest in expansion and/or IR&D on new products or ways to increase efficiency, which then results in the hiring of new employees who pay taxes.
Hey SPF,
A wage freeze is better than slashed salaries and getting laid off like some of us have had to deal with in the private sector. ๐ I’m not singling out anybody in particular because an individual employee such as yourself has to submit to the system as a whole, just like an individual taxpayer such as myself has to submit to the same system. It is the system that is the problem.
My point stands that the power should always be with the person who’s paying the bills in my opinion. These are the taxpayers. If a consumer doesn’t want to buy my company’s products, theres’ nothing I can do to force them to do it so I can keep my job or get a raise. Taxpayers don’t have the same luxury or choice other than by hoping their vote makes a difference, and I believe that they should.
Thank you, thank you, thank you for including my post in this roundup!!
I’m staying out of the union debate; my (personal) intent is to have a blog that’s free from politics. I’m glad you included both the “point” and “counterpoint” here, so people can weigh both sides of the issue. I love reading the great discussion about it in these comments!
Thanks for including my blog article in this roundup.
Hi, Len–
What happened to the previous comments? This is one of my favorite blogs and I am hoping you have not filtered out the exchange since that is part of the appeal here…that you handle each reader’s viewpoint with class.
Hi Holly,
I think the exchange was important too!
I had a massive database failure on Monday that brought my site down for about 18 hours. Without getting too technical, in order to recover I was forced to “reset” my blog by rolling it back to a point in time before those comments were made. I believe I still have all the comments I lost (on all my posts) in another location from where they can be recovered — it will just take me a day or so to dig them up and replace them.
Len
ps – I recovered all of the lost comments EXCEPT one — which ironically was one I wrote about my dad being a volunteer policeman for 25 years. (To which Holly replied below… My apologies for the lost email. I’d reconstruct my lost email if I could remember everything I said. LOL)
Hey Len, I was that same 18 year old. I was such a know it all too.
A union in town’s negotiations broke down recently and some of the sticking points were things like the ability to wear flip flops to work..Really? I know why unions exist, but sometimes they are used as leverage to fight the dumbest things.
Thanks for the mention, btw.
I do agree that many unions have made it difficult to reach a fair compromise, and that is a shame because they are shooting themselves in the foot. But if public workers can’t bargain for their own salaries/benefits, then who will?
My DH is a police officer, going on 20 yrs. I am deeply saddened after all that he has done to serve our communities, he and his co-workers are now being treated like public enemy #1. I always think that if others want his job and resulting benefits so badly, then why don’t they try doing it for a day or two. What how fast they change their minds. Same for those who malign our teachers!
Thanks, Len, for the two articles that present opposing viewpoints. We pay taxes, too. Remember, we (public sector workers) do see both sides. Many have taken concessions, NO raises; never a bonus of course; no paid-for trips, cell phones, cars; lay-offs; loss of any or all overtime pay; increased health premiums each year; increase in pension contributions; furloughs; and on and on.
I am shocked Michigan was not in the top 6 for union employees.
By the way, I live in Michigan and I don’t even know what our quarter looks like. Let me go check… I think it looks quite pleasant. The mitten, the lakes. What’s not to love?
Hey Leo! Oops, sorry about that, I can’t afford new glasses here in Michigan, because the economy is in the potty.
Of course, that also means I don’t have a lot of time for surfing the net (do we actually call it that anymore?) between working my THREE part time jobs, trying to make ends meet. But when I do have time, I never miss your blog, of course! And about the state quarter, well maybe it was amateur day at the mint? Hmmmm, I wonder if treasury employees are union?
Yes, Len, it is abuse of the system when overtime is included in pension payouts … NO DOUBT about it; that is not allowed where I live. Also, the police here do not have the ‘right’ to bargain for their health care plans and pension.
We also do not pay into SS, so we will not get SS when he retires. Also, if husband should pass away, I am entitled to one-third of his previous pension benefit. We also do not get health care benefits once he retires…we do, however, get $250/mo. towards the family plan premium, but it must be through the same company we have now. And then Medicare when we are 65.
There are some states that are indeed pulling the wool over people’s eyes, but not here; in fact, DH is excited to finally ‘retire’ and join the private sector later this year–he will be making $20,000 more per year w/a take-home car and two major bonuses each year … $12,000/ea. (he is already lined up for the job). PLUS, NO SHIFTWORK!
You just can’t be a police officer at 50+ years and remain effective…it’s a young person’s game. It’s wonderful that your father felt the call to duty…to do it for free even?! He is a rare breed, I would think! However, and I mean no offense, but I do believe that times have changed a bit since then…sadly.
Hi Len, thanks for mentioning my post! To be fair, the post idea wasn’t mine, but I happily jumped on the bandwagon. ๐ I definitely don’t think my 18 year old self will listen, but it’s worth a shot.
I totally agree with you about the deficits. I read Lawrence Kotlikoff’s book on this several years ago, and the problem has only gotten worse. He is estimating unfunded liabilities (basically Medicare and Social Security) at $202 trillion. Nope, not a typo. I see no way out other than hyperinflation and/or defaulting on debts and obligations.
You are very welcome! I loved your article. ๐
Gosh, are the unfunded liabilities that high now? Last summer it was at something like $116 trillion! I am so angry about all this out of control gov’t and spending, Jen. It makes no sense for us to save for retirement if our nest eggs are going to be devalued to nothing because of hyperinflation. People are only just now starting to realize that we will all pay for this one way or another — either thru higher taxes, massive cuts in the size of our government (the only real choice), or devaluation of our currency thru hyperinflation.