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.
I hope everybody had a wonderful Christmas. I know I did!
Okay, off we go …
Credits and Debits
Credit: Is America a great country, or what? After all, where else can policemen earn more than $300,000 annually? If you don’t believe me, just ask one of those eight New York Port Authority officers who did this year.
Debit: Surprised? You shouldn’t be — why do you think it costs $14 to cross a bridge into the Big Apple?
Debit: By the way, those paychecks are a prime example of government excess: $300,000 is significantly more than the average medical doctor earns in a single year.
Credit: Truth be told, paying even $200,000 — overtime included — for any job with an almost-unlimited pool of potential applicants is senseless.
Debit: And, yes, those humongous police paychecks help level-set the cops’ taxpayer-provided pensions too. Of course, to earn that much, they have to work upwards of 100 hours almost every week. Really?
Debit: How effective can anybody be working 100 hours week after week? Even working over seven-days, that leaves less than 10 hours per day for family, errands, commuting, sleep, and everything else. Well … assuming they aren’t sleeping on the job. Just sayin’.
Credit: Did you see this? According to Politico’s Michael Grunwald, the US economy is “awesome” too. Yes, “awesome!” I bet there are at least eight New York Port Authority cops who are nodding their heads in agreement right now.
Credit: Mr. Grunwald makes his case using November’s job numbers, the soaring stock market, falling oil prices, and the latest GDP print, which was revised upwards to 5% — the highest rate in more than 10 years. Hooray!
Debit: Sadly, in the same way a child believes that he really did see a magician cut his on-stage assistant in half with a saw, Mr. Grunwald takes the economic data he’s presented with at face value, while dismissing us party-poopers who dare to reveal the statistical sleight-of-hand. To Mr. Grunwald, guys like me are just “Chicken Littles.” No, no … it’s okay; I’ll find a way to carry on. Somehow.
Credit: The truth is, crashing oil prices are not indicative of an expanding economy — especially one as large as the United States that is, supposedly, growing at the frenzied pace of 5%.
Debit: You can believe America’s GDP ran at a 5% clip last quarter — but please, please, explain how that’s possible in the face of declining consumer spending and persistently stagnant wages — the Port Authority police notwithstanding. Lord knows economic cheerleaders like Mr. Grunwald aren’t.
Debit: As Zero Hedge points out, in reality, that revised 5% GDP figure is largely due to unabashed accounting gimmickry: In fact, roughly half of last quarter’s growth was attributed to previous consumer spending on — get this — those outrageously expensive Obamacare premiums. Forward!
Debit: As for that misleadingly “low” 5.8% unemployment figure … It doesn’t account for the US labor participation rate being at its lowest point since 1978; it also fails to highlight that, despite a growing population, fewer US-born Americans have jobs today than in 2007.
Credit: Then there’s the biggest “tell” of all: the Fed’s outright refusal to end its dollar-killing zero-interest rate policy — which has been running for five years now. If the American economy truly is as rosy as the GDP — and mainstream pundits like Mr. Grunwald — suggest, then interest rates should be rising. Sharply.
Debit: Yes, your 401k balance may be as flush as ever, but it’s only because of the Fed’s reckless easy-money policy. As Bull & Bear Mash notes, the S&P 500 is now so completely detached from the commodities market that a collapse is all but inevitable.
Debit: As Charles Hugh Smith rightly observes: “If the Fed can’t raise interest rates even a quarter-point without threatening to collapse the unstable pyramid of debt-based affluence and consumption, then what does that say about the fragility of (US) ‘growth’ and ‘prosperity’?”
Credit: It’s a simple question. I just wish mainstream economic cheerleaders like Mr. Grunwald would help out us Chicken Littles by answering it. Now that would be awesome.
By the Numbers
Like most anything else in the economic world, wages are generally a function of supply and demand. Last year, the annual mean US wage was $46,440. Here are the annual mean wages for the ten largest occupations in America (from 1 to 10):
$25,370 Retail salespersons
$18,880 Fast food and other food prep workers
$29,990 Office clerks
$68,910 Registered nurses
$20,880 Waiters and waitresses
$33,370 Customer service reps
$26,690 Laborers and freight/stock movers
$34,000 Secretaries and administrative assistants
Source: Bureau of Labor
Other Useless News
Here are the top 5 articles viewed by my 6203 RSS feed and weekly email subscribers over the past 30 days (excluding Black Coffee posts):
- 10 Things That Today’s Middle Class Can No Longer Afford
- 10 Essential Negotiating Tactics Everyone Should Know
- How to Quickly Tell If Your Grocer’s Produce Is Genetically Modified
- 3 Reasons to Have an Emergency Fund That We Don’t Talk About
- 8 Reasons Why My Favorite Charity Is Me
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The Question of the Week
Last Week’s Poll Results
Have you ever flown on a jumbo passenger jet with twin-aisles?
- Yes (66%)
- No (31%)
- I’m not sure. (3%)
More than 300 people responded to last week’s question and it turns out that two out of every three folks who answered have had the pleasure of flying on a twin-aisle passenger jet. To-date there are 12 wide-body aircraft that have been in service at one time or another in the West (note: bold signifies aircraft that are still in production): Boeing’s 747, 767, 777, and 787; Airbus’s A300, A310, A330, A340, and A380; Lockheed’s L-1011; and the McDonnell Douglass DC-10 and MD-11. The Airbus A350 is a wide-body competitor to Boeing’s highly-successful 787 that is scheduled to enter service this January.
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! You can reach out to me at: Len@LenPenzo.com
This week I got this odd question from 69GTO:
Did you ever wonder why the people who we’re supposed to invest our money with are called ‘brokers’?
Beats me. Truth-in-advertising laws?
I’m Len Penzo and I approved this message.
Photo Credit: brendan-