The previous Secretary of the Treasury, Hank Paulson, got our vote as the most corrupt, incompetent, unethical man ever to hold the position. Yet as low as he set the limbo bar, his successor cleared it with inches to spare. Tim Geithner has done more than any single man to prolong an economic miasma that walks like a depression, talks like a depression, yet is never officially referred to as such. After 6 years of low employment, stagnant wages, and ever-increasing sectors of the economy being handed over to the state, the word “recession” is euphemistic.
Even before Geithner’s 1st day on the job, he’d “neglected to pay” $35,000 in taxes. This didn’t come up before the confirmation hearings, and the taxes presumably would have stayed unpaid had he not been the person deemed most qualified for the job. His solution? Pay the taxes plus a 42% penalty. Big deal, it’s only money, and thus he let his personal financial situation serve as an apt omen for the nation.
The $35,000 is a ten-millionth of the amount Geithner was entrusted with as his share of the bank bailout (see Paulson, H.) Geithner handed said taxpayer funds over to the banks with the biggest influence in the White House and on Capitol Hill, but only on the laughably weak condition that said banks spend a few million less in executive bonuses than they otherwise might have. But hey, AIG paid all the money back:
AIG disabled comments on this video – we can’t imagine why – but you can look at the number of likes and dislikes for an idea of how the commercial and AIG’s reputation are resonating with the American people.
Wouldn’t it have been easier to just run 60 seconds of a cufflinked hand flipping the bird to the viewers?
One good thing about Geithner, he helped gauged the indolence of the American people. If Americans can’t rally in the streets and seek literal blood after he and his cohorts shamelessly and gleefully lengthened the depression, then there’s no telling how pliant we’ve become. If the new Secretary of the Treasury is anyone other than this guy,
expect more of the same.
Depressed yet? Welcome to another Carnival of Wealth. Some good personal finance blog posts, some awful ones. We do it every Monday, weather permitting. Let’s see what we’ve got:
Harry Campbell at Your PF Pro recommends against front-loading your 401(k). You might lose matching funds if you reach your annual maximum with plenty of year left to spare.
We’ll indulge her, but the woman who calls herself “Mochi & Macarons” is taking this pseudonym thing a little too far. Heck, even “Sam” Wes “Dogen” at Financial Samurai chose an actual human name to hide behind. What’s she afraid of, anyway? Anyhow, she writes at something called The Budgeting Tool, and we only wish we’d thought of that as a nickname for Trent Hamm at The Simple Dollar.
Mochi & Macarons (screw it, we’re calling her Diane) argues that being single is more expensive than being married.
First, tell that to Tiger Woods, Rupert Murdoch, Michael Jordan, Paul McCartney, Craig McCaw, Mel Gibson or Garth Brooks. Second, we’d tell you more about what Diane had to say but the barrage of font colors and sizes on her site made our heads hurt.
Speaking of pseudonyms, “Bill Smith” at 2013 Taxes explains how the IRS has delayed the start date for electronic filing. It’s now this coming Wednesday, which is 8 days later than usual. This shouldn’t concern you, because you should be paying your taxes at 11:59 p.m. on April 15. In fact, you should mail your taxes from Pago Pago just to keep Uncle Sam out of your pocket for a few additional hours.
Here’s an example of the kind of useless post we include only to make fun of. From Carmen at My Best Car Insurance 101,
Every driver has to have car insurance and no one likes paying more to insurance companies than they must, especially when you can find cheap quotes online.
That’s garbage. Don’t waste our time with your repetition of the obvious. This post also includes half a dozen instances of our least favorite word, “consider”, as in:
Any driver with a car loan should consider carrying GAP insurance
Don’t tell us to “consider” doing something. Either tell us to do it, or don’t. To wit: “Consider smoking less.” That was easy, wasn’t it? The considering, we mean. It takes a matter of seconds and it doesn’t change a thing. “Consider” is a weak, ineffective word used by dullwits and the uncommitted. At least have the strength of your own opinions.
Holy crap, there’s an accredited university teaching personal finance? There is, and it’s the University of Kentucky. John Kiernan at Card Hub explains this major development in education. While the schools that teach music appreciation still outnumber the ones that explain how to build wealth, it’s a start. John also includes one of the most unintentionally funny lines in CoW history, after pointing out that Kentucky ranks 46th in the nation in financial literacy:
Kentuckians are more financially savvy than residents of states like Arkansas, Mississippi, Louisiana, and West Virginia
From Odysseas Papadimitriou at Wallet Blog, the skinny on private-label corporate bonds, a/k/a floating-rate demand notes. Offering returns that dwarf those of 5-year CDs, these are nothing more than debt marketed by major corporations. The downside is that you can sell them only back to the company you bought them from.
Darwin of Darwin’s Money explains how he negotiated 10% off the price of hundreds of dollars of flooring, just by throwing irrefutable logic at the Home Depot clerk and his manager.
The remarkably similar Dan at ETF Base lists the 8 largest exchange-traded funds on the planet, how much they have under management, and what kind of expense ratios they charge.
(Something from My Life Insurance Quotes 101, cousin to My Best Car Insurance 101. Should we lambaste it? Nah, whoever’s behind it has already suffered enough today.)
But if we are going to lambaste someone, we regret that the opportunity to do so to a cherished CoW submitter has presented itself. (This ties in to what we were saying earlier about the word “consider.” Hear us out.) From Louis Garner at Wallet Hub, a tip on how to save money on alcohol:
I’m not going to tell you to stop drinking…it’s naïve to think people won’t inevitably buy alcohol. Instead, I merely want to help you save as much as possible in this major spending category.
How about “I’m not going to tell you not to stop smoking…it’s naïve to think people won’t inevitably do something so obviously detrimental to their health. Instead, I merely want to help you incur as mild a form of emphysema as possible.” Same freaking thing. Louis starts his piece by positing that we’re a nation of negative-worth debtors, then explains how to spend money on something that’s always a luxury.
Castelmavre: “This is a producer that’s reasonably widely available. Vintage after vintage is outstanding, and a bottle only runs $13-$15.”
It does? Then we just discovered an easy way to stop $13-$15 from leaving your wallet. This isn’t hard, gang. Either justify your frivolous expenses, or stop making them.
Will at Card Guys employed the services of our favorite hack blogger, journalistically trained Miranda Marquit, to emphasize his points about how to save money by…budgeting!
With a traditional budget, you add up all of your income, and you add up all of your expenses.
And on and on it drones through umpteen paragraphs. (Do people still say “umpteen”? Upon further review, we got that from a Donald Duck cartoon that was released probably 70 years ago.)
Carefully think about your current financial situation, and decide what type of spending plan or budget is most likely to work for you.
Probably a nice gal, but Sweet Jesus she’s awful.
We’re due for somebody good. “Good” means interesting, unique, worth reading because the post comes with a tangible benefit. Like this one from Amanda at My Dollar Plan, who explains when you might have to file a tax return even if someone claimed you as a dependent.
Even reading a clear, informative explanation of a tiny part of the tax code makes our heads spin. For instance, if a church (“or qualified church-controlled organization that is exempt from employer social security and Medicare taxes”) paid you at least $108.28, you might have to file. Ditto (Do people still say “ditto”? Ah hell) if your gross income is more than the larger of $950 or [earned income + $300.] But yes, let’s continue to make the tax code more complex with every passing year. The Chinese will bow down to our formidable bureaucratic power.
The remarkable Paula Pant at Afford Anything returns with a moral tale about assumptions. The Atlanta-based landlady had to eat several months’ worth of potential rent payments because of an oversight any one of us would have made.
Michael at Kitces.com, America’s youngest bridge player, explains the benefits that can accrue for getting your mortgage at the Bank of Mom and Dad. He doesn’t mean a handout. He means a formal loan that skirts the lending requirements of America’s financial establishment. Until the federal government starts regulating parental loans, which sounds inconceivable and absurd until you remember that the Department of Agriculture once sued a farmer for growing his own wheat (because that meant he “unfairly” didn’t buy any, and thus he affected interstate commerce.)
One of the paradoxical laws of blogging is that the non-native English speakers usually have a better command of the language than the alleged anglophones. Pauline Paquin at Reach Financial Independence is in the former category. She explains how to give to charity while still taking care of business at home. Pauline is unapologetically in debt, and with good reason – to finance real estate investments, not to travel the world, although she’s doing that too. And she’s carrying zero consumer debt (big difference between that and a mortgage, and if you don’t know that, click here.)
Dividend Growth Investor is loading up on ConocoPhillips, which is paying giant dividends and trading at barely 8 times earnings. He likes it so much he’s not only bought it, but replaced Exxon Mobil with it in his portfolio.
Big finish. The brilliant Jason at Hull Financial Planning explains the logic behind and likely result of the Jumpstart Our Business Startups Act, and again we wish our elected representatives were as committed to reducing the debt as they are to creating clever acronyms. The new law basically makes crowdfunding easier. Let’s just say Jason doesn’t give the idea his full enthusiasm. In fact, we thought he was likening it to gambling even before he made a blatant Las Vegas comparison in the piece’s final line. If you visit Control Your Cash purely for entertainment, check Jason out. He’s perceptive and funny.
As is PKamp3 at DQYDJ.net, but you knew that already. This week he lists all 50 states (and 1 federal district) by a telling metric – net federal benefits per capita. Hawai’i is the biggest net teat-sucker in the nation, or would be if D.C. didn’t exist. In fact, the District is so far ahead of any state that it requires a logarithmic scale to fit our nation’s capital on the same graph as everyone else.
Suba Iyer at Wealth Informatics says there are 9 reasons (at least) why you aren’t making more money. Her suggestions are not only all valid, but come with their own counterarguments. Nos. 5 and 7 are particularly discouraging. But hey, more opportunity for the rest of us when the people who love to justify their poverty continue to do so.
Finally, Andrew at 101 Centavos introduced us to “Stupid Labeling Tricks”. If you’re the kind of person who doesn’t want rBGH in her goat milk derivatives, this post is for you. And if you don’t know what the acronym stands for, or why the underlying substance has such a bad rap, maybe you should find more important things to do than protect yourself and your sensitive family from non-existent threats.)
(Side note: Your humble blogger went to his local REI outdoor store a couple years ago to get a water bottle. Some of the ones on hand were advertised as “BPA-free”, incorporating an acronym never heard before. It didn’t matter what BPA was, or how many parts of it per trillion it would take to compromise someone’s health, the manufacturers still found the absence of BPA compelling enough to advertise it to a gullible public. They might as well have said the bottles were “fat-free” or “unleaded.”)
Thanks again for joining us. New post Wednesday. Another new one Friday. Anti-tip every day of the week. Goodnight now.