Poverty, Perpetuated

 

"Before the Speaker calls each session of the House to order, this coin-silver inkstand is placed on the rostrum. The inkstand is considered the oldest surviving artifact of the House and was made between 1810 and 1820. Although its origins are mysterious, it most likely came into the House around 1819. The inkstand is stamped with the mark of J. Leonard, a Washington silversmith and watchmaker. It contains three replacement crystal inkwells and is adorned on both sides by swags and eagles. The feet of the tray take the form of fasces with snakes winding around them, classical symbols of unity and wisdom, respectively."

“Before the Speaker calls each session of the House to order, this coin-silver inkstand is placed on the rostrum. The inkstand is considered the oldest surviving artifact of the House and was made between 1810 and 1820. Although its origins are mysterious, it most likely came into the House around 1819. The inkstand is stamped with the mark of J. Leonard, a Washington silversmith and watchmaker. It contains three replacement crystal inkwells and is adorned on both sides by swags and eagles. The feet of the tray take the form of fasces with snakes winding around them, classical symbols of unity and wisdom, respectively.”

 

Among the pointless ceremonial activities that the federal government undertakes, State of the Union addresses are about the most egregious. We can do this by numbers:

  1. President says a few platitudes
  2. His party applauds
  3. The other party doesn’t
  4. If the Speaker of the House is of a different party, he has the toughest job of all. Seated behind the President, the Speaker has to show slight indignation at the party-line tripe being spewed mere feet in front of him, but not such effrontery that he becomes the focus of attention. Thus, the introduction of a prop, the inkstand, to distract viewers from his facial gesticulations.

The whole speech was platitude upon platitude, as if a) you were expecting anything else, 2) the President’s speechwriters were capable of writing anything else, iii) the public is going to sit through an hour, 5 minutes and 7 seconds of anything that requires conscious thought. Fortunately for us, committed to providing you with new blog posts 3 times a week, the President delivered a personal finance aside:

[T]omorrow I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in.

First, the MyRA is an account, not a “savings bond.” A savings bond can be a component of an account, but we never went to Occidental College. The MyRA is a glorified way of offering government debt and guaranteeing the slightest of returns to the investors who are most in need of growth, rather than wealth preservation.

The MyRA is a Roth IRA (you pay taxes when you contribute, not years later when you withdraw, making it the inverse of a traditional IRA) with a twist. The twist is that the MyRA consists of nothing but short-term T-Bonds. (Check out the 10-year T-Bond rate, 3rd column from the right, and see how many of the annual yield numbers beat 3%.) T-Bonds are a fantastic, safe investment if safety is your primary goal. Safety sounds good to the greenhorn, as it conjures up images of an impregnable front door, an ADT dispatcher on call 24/7, stepping on home plate triumphantly, or being wrapped in the clutches of a large masculine loved one. But if you haven’t got a retirement plan yet, and you want to spend your golden years doing something other than staying in an assisted living facility and hoping that tonight’s dinner entrée will be easy to chew, loading up on T-Bonds isn’t going to get you there.

You know who buys T-Bonds? Institutional investors, looking to move money out of one investment and into another. You know which individuals buy T-Bonds? No one. The returns suck. We defy a single reader to show us proof that they own more than $1000 in T-Bonds.

Wednesday night, the President conveniently neglected to mention the continuing rise of the deficit. A greater negative national balance means the Treasury needs to issue more debt, i.e. T-Bonds. But how to attract more investors to buy those T-Bonds? The Treasury could always increase the interest rates, but our biggest creditors - China, Japan and the UK – are already saturated with U.S. government debt. Or, the White House and its fiscal policy arm, the non-autonomous Treasury Department, could aggressively encourage employers to offer MyRAs.

Opportunity costs. You can’t spend (or save) the same dollar twice. Every one directed toward a MyRA is one fewer dollar invested in the stock market. Good, those greedy corporate Wall Street pigs already have enough of our money. Oh wait, stock returns have consistently outpaced bond returns over the length of the typical investor’s career? Never mind, then

Even worse, MyRA contributions will not be indexed to inflation. That’s what TIPS, Treasury Inflation-Protected Securities, a different kind of Treasury issuance, are for. Subtract the inflation rate – even the official inflation rate, which shaves a point or two off the real rate – and you’ll find that the MyRA doesn’t do a thing to help disenfranchised working Americans save for retirement. And again, should you want a MyRA, you’ll pay the taxes on these contributions up front.

Getting MyRAs to work – i.e., the government getting sufficient interest in them from investors – necessitates the invention of not merely a straw man, but a straw group. That’d be the poor working people, simple folk just trying to put bread on the table, but prohibited from doing so because…what’s a good, believable reason? How about “Their employers don’t offer 401(k)s”? Boom, this is easy.

The returns on the MyRA are not only minimal, and possibly negative even without factoring in taxes, the absolute last people they’re designed for are the “working families” whom the government continues to simultaneously lionize and condescend to.

If you make modest money, and your employer doesn’t offer a 401(k), open your own IRA. Do it at Vanguard, TD AmeriTrade, whatever. And for God’s sake, don’t invest it in T-Bonds. Also, pay off your consumer debt first.

Last night, a poster at Free Republic joked that given “that the market is run by absolute idiots,” the only tangible benefit the MyRA will make will be to increase the stock price of over-the-counter issue Myriad Entertainment & Resorts (symbol: MYRA). First publicly traded 17 years ago, Myriad plans to someday open a casino in Tunica, Mississippi, a/k/a the Redneck Riviera. Sure enough, after not breaking past 1¢ a penny for years, yesterday morning MYRA rose to 10¢ in an hour, more than doubling its previous all-time high.

Never Do Business With A Russian. Seriously.

We're NOT saying Hitler had any good ideas. But if he did, Operation Barbarossa was one of them.

We’re not saying Hitler had any good ideas. But if he did, Operation Barbarossa was one of them.

 

A shot of our own medicine? Make it a double.

We’ve repeatedly mentioned the wisdom of buying, selling, and even window shopping on eBay, just to get a legitimate and unbiased idea of what your previously enjoyed wicker stool or T206 Honus Wagner card is worth. (For the latter, $500. We’ll even hand-deliver payment if you want.) We’ve also warned you to take precautions, using only PayPal for payments and not selling to anyone outside the United States. Or at least, outside the United States and Canada, assuming you’re OK with filling out a customs form or two. Or at least, outside the U.S., Canada, Australia, New Zealand, and Western Europe.

Go ahead, tell us we’re idiots. We deserve it. We got greedy and got defrauded.

A couple of months ago we sold an iPhone 4S, functional but with a giant crack down its back, for $265. Our account specifies that we only do business within the United States, but the high bidder was a crook named Pavel Saltykov, user name sapavel, mario291@bk.ru, who lives or at any rate has an address on Rural Bogorodskaya, 19B 6, in Ufa, Bashkortostan. We could have refused his bid, but were feeling foolishly charitable of heart (that was our first mistake) and noted that he’d included more than enough to take care of shipping and duties, so we figured what the hell; let’s increase the level of international amity between former enemies by just a smidgen.

Now, as far as we’re concerned, the Cold War is back on. Reagan should’ve nuked them when he had the chance.

We’re not huge eBayers, maybe one transaction every couple of months. After Mr. Saltykov’s prompt payment we went to the post office, insured the package, got a customs form, kept copies of everything, etc. Mailed the iPhone out November 4. Two months passed and we never heard anything, so we figured everything was fine.

A fortnight ago, we received  an email telling us the eBay account was in danger of suspension. Naturally, the initial reaction was “Spam. Come on, this is easy.” But the email didn’t look like spam, all its words were spelled correctly, and the return email address checked out as an eBay.com domain. A quick login to the eBay account showed that the Russian buyer did indeed open a complaint.

He opened it on Christmas Day. Sorry for not checking our eBay account every day in the event that someone files a claim without our knowledge (and for spending the day celebrating a little event called the birth of Christ, instead of being godless Commie heathens.) It bears mentioning that Saltykov never once tried to contact us directly, which eBay itself lists as its first recommended means of resolution. He just went straight to eBay. Our account showed that once he opened the claim on Christmas, we hadn’t responded in the allotted 7-day window. Granted, that was difficult to do, given that we didn’t know that a claim had been filed, let alone that the clock had started ticking. Excluding the most recent piece of correspondence, the email that we thought was spam, every word of this (extremely unilateral) conversation was in the form of eBay messages – which we’d only have seen if we’d happened to have logged into our account. Given that we had no items for sale, and weren’t shopping for anything, we had no reason to peruse our account; nor to see that we’d neglected to defend ourselves against a grievance that we never knew had been filed.

Only that day did eBay send us an email, rather than an internal message, saying in so many words, “We paid the guy on your behalf, now you owe us.”

Which prompted us to pick up the phone, given that eBay wasn’t letting us send an email (or even one of their stupid internal messages) with regard to this case. We called and said in considerably more polite terms than were justified that they had to be fricking kidding us, telling us that we now owed close to $300. Their email even included the ominous phrase “case closed.” The representative we talked to said, “Thanks for the proof that you sent it. But we don’t have proof that it was delivered.” Well excuse us for not being Russian Post.

So we tracked the package on the U.S. Postal Service’s site. The last thing they know, the iPhone was at an international holding facility in Los Angeles. A look at the publicly available tracking data for the package told us as much. Keep in mind, this is now more than 2 months since we mailed the damn thing. We called to find out where it is, the USPS opened up a case, and the representative said, “You know, you really should have opened your claim within 30 days.” We gritted our teeth and kept quiet. She said to give it 3 weeks, at which point we should have heard from either someone on the American side or the Russian side. She mentioned something about possible reimbursement, and seemed sincere.

If either postal service reimburses us, we had agreed to reimburse eBay. It seemed like the American thing to do. HOWEVER…

The reason eBay even demanded payment in the first place, rather than just forcibly removing it from us, is that the PayPal account linked to our eBay account had a zero balance. Blood from a stone, etc. A couple of days ago we received a PayPal deposit for an unrelated transaction, thus we had a positive balance. At that point eBay (with PayPal’s approval, seeing as the one is a subsidiary of the other) just up and took our money.

Takeaways:

  • A Russian can claim never to have received a package, and somehow that’s the fault of the American sender. Not to sound xenophobic here, but does a Russian eBay rookie with minimal transactions get the benefit of the doubt over a 12-year member with a 99% rating, from eBay’s home country no less?
  • eBay serves not only as judge, jury, and executioner, but also as plaintiff’s attorney, collection agency, and bounty hunter. With PayPal as its trusty deputy.
Recommendations:
  • Use Amazon instead. Or Craigslist, even.
  • Never do business with a Russian.

The (F)RotM to end all (F)RsotM

From Occupy Grand Rapids. Yes, such a thing existed. Image used utterly without concern for private property rights.

From Occupy Grand Rapids. Yes, such a thing existed. Image used utterly without concern for private property rights.

Not literally, of course. We’ll run another one next month. But this one’s so good, so emblematic of what being the (F)RotM means, that we couldn’t wait for the 31st before bestowing the laurels upon this month’s winner.

From The Huffington Post, which evidently has standards as lax as the Yakezie Carnival’s, comes a soliloquy/possible suicide note from Dirk Hughes, who currently enjoys an uninspiring career registering students at the Grand Rapids, Michigan campus of ITT Technical Institute. That’s not our assessment of Dirk’s job, it’s his.

I have a doctorate. I have been employed full-time for the 35 years I have been of employable age with only a week or so between jobs. I have worked my butt off my entire adult life.

Well, there’s your first problem. What Dirk’s doctorate is in is unclear: his LinkedIn page states only that he attended Cleveland State University 22 years ago, without mentioning what he studied nor what degree he earned. There’s also no mention of where he took his undergraduate degree. Hopefully his Ph.D. thesis (we’re assuming his doctorate isn’t an M.D., or he wouldn’t be working at ITT) is more diligently researched and annotated than is his LinkedIn bio.

He dropped out of college twice (for most of you, once is plenty), attempted to write a novel, then borrowed money to attend law school at a superannuated age. Then he failed the bar. Thrice. But somehow he is, in his own mind, evidence that “hard work just doesn’t pay off.”

Once my wife graduated with her masters (Ed. Note: In human resources, the most vile occupation this side of baby seal clubber. Apparently a mere bachelor’s degree isn’t sufficient to qualify someone to leave condescending notes in the break room and coordinate homophobia awareness seminars) we moved to another city for her new job.

This was also the time for me to go back to school and for us to start having a family.

(Dramatic line break ours.) Hey Dirk? Excuse us – hey, Dr. Dirk? No, that was the worst time for you to start having kids. Raising a family on one income is hard enough. But raising an family on one income minus whatever your newly incurred tuition was? It doesn’t take an ITT certificate to know that expenses were going to run up against revenues, pass them, then take several victory laps while blowing kisses to the crowd.

Alright, maybe that’s an unfair generalization. If you were returning to school to get, say, a civil engineering degree, that’d guarantee you work and a great wage. Is that what you did?

I got my bachelor of arts in English

Oooooh, so close.

The wife’s career blossomed – one advantage, if you want to call it that, of today’s regulatory and regimented workplace – while Dr. Dirk’s faltered. He tended bar. He worked in sales. Neither of those jobs require a degree, or even a high school diploma, but Dr. Dirk had worse than just a high school diploma. His book-learnin’ bona fides consisted of a high school diploma weighted with a huge liability in the form of a useless bachelor’s degree from a school so embarrassing to have attended that today he doesn’t mention it. Again, the useless degree isn’t merely useless like an appendix or a vestigial finger. It’s a negative. A bachelor’s in the soft arts costs money, which thus paradoxically requires its holder to find an even better-paying job, despite him now being ill-equipped to do anything beyond a) pouring beer or 2) prompting secretaries across the Tri-County area to say, “Sorry, the purchasing manager is in Turkmenistan for the week. Why don’t you leave your card and I’ll get him to call you when he gets back?”

I finally landed a teaching job with one of those for-profit colleges you see on TV. I wasn’t a big fan of the corporate philosophy

He doesn’t mention that the college is ITT, and who can blame him? For a gifted academic like the Doc, that’d be like a Ferrandi graduate keeping his job as a Papa John’s pizza assembler on the down low.

Not satisfied with being overeducated and broke, Dr. Dirk is perpetuating the cycle for a new generation of same in his registrar job. Again we turn to CYC favorite Mike Rowe: “We are lending money we don’t have to kids who can’t pay it back to train them for jobs that no longer exist.”

The wife left the Doc, doubtless looking for a man who could support himself instead of a quixotic dreamer. By this time they had 2 kids, and the Dr. started working at a factory. He got remarried, turned 45, bought a house (“a few minutes before the housing bubble burst in 2006″), suffered a bout of congestive heart failure, and the only thing that stops this part of the story from turning into a mid-period Bruce Springsteen song is that our hero now decided he’d like to give lawyering a try. Again, he’s 45. 48, actually, when he failed the bar exam for the first time. It wouldn’t be the last.

Not cognizant of the part of the Universe’s plan that states “Dirk Hughes, under no circumstances, should be practicing law”, he took the exam again. And failed again.

It’s only with hindsight that we know that he bought his house at the top of the market, but Dr. Dirk can’t help but turn that fact into melodrama. (“Our home dropped in value every second.”) So did almost everyone else’s, but there’s nothing like a little personal projecting to make societal problems seem as though they’re exclusively Dirk Hughes’s. But at least, at least, he was smart enough not to take on any other stupid expenses, right?

The parent loans I had taken out for my now college-aged children were coming due.

The child is the father of the man, or something. Not content with mortgaging his own future, and seeing how well that turned out, Dr. Dirk decided to burden his kids with the same handicap. It’s much like how alcoholics teach their kids to be alcoholics and abusers instruct their kids in the fine points of abuse (whether directly or indirectly.) Yeah, he’s a bad father on top of everything else.

He also confused “levy” with “levee”, but if the Huffington Post’s elite team of proofreaders doesn’t think homonym confusion is important, who are we to bring it up?

Also, Dr. Dirk lives 30 miles from work. ITT gave him a $150 gift card and he spent it on gas.
The strangest thing about his lament, other than a would-be novelist having so unsophisticated a command of English, is that he still doesn’t get it. By that, we’re not talking about his insistence that a college degree is economically critical. Lots of people can’t figure that one out. What we mean is that he should seriously be grateful that his law school aspirations never made it to the completed stage. Dr. Dirk later finds out that a friend is working as a bankruptcy lawyer for considerably less than Dr. Dirk’s registrar salary. Shouldn’t the takeaway from that be “Thank God I failed the bar exam repeatedly”? It isn’t, or if it is, we couldn’t find his articulation of it.

Dr. Dirk likes to talk about how hard he works, which is meaningless; millions of other people make similar boasts. But he offers no solutions to his predicament, no hope, and, even at 50 or so and with plenty of academic credentials, no evidence that he understands how the world works. Fortunately, we do, and in the unlikely event that he’s reading this we’re willing to help him out.

RULE 1 OF ADULT LIFE

No one gives a damn about your effort. They want only results.

Your humble blogger’s last (and hopefully final) 9-to-5 gig was at an advertising agency. Such workplaces often pride themselves on their looseness (no dress code, wacky knickknacks adorning the hallways), and God knows we took advantage of the looseness. Need to meet with the client? Well, let’s do it on the client’s turf, not at our office. Maybe the client will spring for lunch. And if the meeting should take 2 hours, schedule it for 2 p.m. At that point, are you really going to come back to the office from the other side of town just to leave again? After a while we started getting cocksure and setting those meetings for even earlier in the afternoon (or later in the morning, as you do.)

All told, we probably spent 25 hours a week in the office. And were out of there at 5 p.m. every day, like it was a religious imperative. Meanwhile our contemporaries got there early, stayed late, came in on weekends, and bragged about it. But we got more work done than anyone in the department, typically completing thrice the assignments of an ordinary worker bee.

Not because of a heroic work ethic (see above.) Not necessarily because of personal efficiency. But rather, because we knew what to do, did it, and understood the unrepealability of Parkinson’s Law. The self-congratulatory cubicle soldiers screwed around all day, but they did their screwing around at the office and could be persuaded to look busy at the appropriate times. We were more interested in whittling the pile of assignments down as fast as possible (but not at the price of shoddiness, of course.)

Hardest worker in the office? Hell no. Worker who produced the most results? Yes, especially per unit of time spent.

The moral? How hard we worked was of no interest to anyone. Right now, you could grab a shovel and spend the next 8 hours digging holes. Then, spend the following 8 filling the holes back up. Do that 7 days a week and we guarantee your back will ache, your mind will atrophy, and you’ll be the hardest-working person on the block if not the county.

But if you’re expecting a reward for that, you’re even dumber than Dr. Dirk.

You didn’t do anything, or at least nothing that anyone wants and is willing to pay for. Effort for its own sake is a waste of time. And by that measure, Dr. Dirk’s life has been squandered.

At last count 378 fellow idiots had chimed in in the comments section, sympathizing with Dr. Dirk and laying blame on everyone from the Koch Brothers to the Walton clan of Walmart fame. We’re a little surprised that Dick Cheney and Donald Rumsfeld avoided the commenters’ wrath, but at least they reminded us why we don’t and never will run comments on this site.

The rules for building wealth are simple, unambiguous, and posted here almost every day. Buy assets. Sell liabilities. Look at each transaction from the other party’s perspective. Leave emotions out of it. Dr. Dirk sold assets, bought liabilities (God, did he ever), looked at transactions from his own perspective only, and continues to emote all over the place, everywhere. He deserves to be poor and struggling, especially because of his refusal to adapt to circumstances instead of fighting them. You want to be like him, or do you want success, independence and the capacity for affluence? The choice is easy, the work it takes to accomplish said choice not much harder.

Dr. Dirk’s story is part of a series on the Huffington Post about losers who failed and are blaming society rather than themselves. If we’re feeling inspired (don’t expect miracles, you already know we’re lazy) we’ll write about some more of them.