Tax Dollars at Work

I discovered the most magical place several months ago. It's a large building filled with books. Once you find the book you want to read you can borrow it for free, and when you're done you return it so that the next person can read it. You can also borrow DVDs, audio books, music CDs. It's so sustainable it's almost a collective, more socialistic than health care reform. It's the public library.

Back in college and grad school I went to various libraries all the time, but I'd somehow forgotten that they existed. I got into the habit of buying the books I wanted to read and then giving them away, because my house is full of books and I just don't have room to keep too many more of them. For some reason I just assumed that I'd have a long wait for any newly-published book, and that it wasn't worth it. The new penuriousness led me to the library last month, and I have to say that I've been pretty stupid all these years.

My taste in literature is clearly not shared by the other residents of my small city, because I've never yet had to reserve a new book and wait for it. And I'd completely forgotten how libraries subscribe to each and every periodical, and how they provide comfortable chairs for you to slouch into while reading all the magazines and newspapers you can handle in one sitting. There's even pencils and paper lying around in case you want to write something down. There's free WiFi, but there's also every reference book imaginable, so you don't need to rely on the vagaries of Wikipedia for information.

The bast thing about the library, though, is that it's free because my school taxes pay for it. I don't have children and have previously gotten incredibly annoyed each fall when my ridiculously high school tax bill arrived. At least now I can feel as if I'm getting a benefit for all that money. In fact, this is perhaps the only instance where I can hold in my hands a physical manifestation of my tax dollars at work.

Also, don't buy into the myths. If you see someone you know at the library and want to have a short conversation, go for it. I've never once been shushed.

Winner Takes It All

Because jobs in my field are hard to find these days, I've decided my financial plan is simply to win PowerBall. It's a nice jackpot this week: $122 million if you take the cash rather than the annuity. Even after taxes, that's, well, it's enough money for the rest of my life. I bought 10 tickets, so clearly I'm going to win this thing. In spare moments, I've been trying to figure out what I'm going to do with some of that money. If a check for $122 million won't burn a hole in your pocket, then nothing will.

Of course I'll buy a new car, and book a trip first-class on Emirates Air so I can experience the private sleeping compartment. That's maybe $200K, though, leaving me with an awful lot of change. I really like my current house even though it lacks a pool, so I'll re-landscape and have one put in. That still leaves me with way too much money. One advantage of spectacular wealth would be my ability to avoid winter altogether should I so choose, so I decided that I'd buy a winter house someplace warm.

Because I love mid-century modern architecture, Palm Springs seems like the most logical winter destination. Plus, I could attend the Indian Wells tennis tournament every year. So, yesterday I went onto the Palm Springs MLS to see about dropping a couple of million and helping to revive the California economy.

Can you imagine my joy when I discovered that for $3.25 million I can purchase Twin Palms, Frank Sinatra's actual house? This feels like an incredible bargain; it even comes furnished. I can't wait to have sex in Frank Sinatra's bed, or for my cat to shed in Frank Sinatra's ugly chair. My dog has a weird propensity to crap on concrete rather than grass, and Frank Sinatra's house has an amazing patio for him to defile. Twin Palm means family fun for everyone.

The drawing is tonight, so I can go pick up my check tomorrow and buy the place over the weekend. If you don't have any Labor Day plans, come fly away to Palm Springs.

Endurance

What if money was worthless? What would our lives be without money?

I assume none of us would work, or at least not work as we currently understand it. Why slave away in an office if the return is useless paper? We'd only do a job that resulted in tangible returns: food, clothing, fuel. The only jobs that would result in such returns would be jobs that produced something that could in turn be bartered. In other words, we'd work only to produce commodities that could be exchanged for other commodities. Press releases and brochures are not such commodities, so if I wanted to work, I'd need to change careers fast.

Very few of us have any experience producing commodities these days, though. Those of us who now hold production or manufacturing jobs, those of us who now do the manual labor and are not the best compensated, would become those who are best equipped to survive. White collar workers, on the other hand, will be relegated to the bottom of the food chain. Us white collar workers won't have jobs to go to, anyway. If money is worthless, we won't need bankers, investment advisors, insurance agents, analysts. We won't need people to sit in chairs all day emailing and taking meetings.

I assume we'll be allowed to stay in our houses since the "banks," which won't be around anymore, won't have any use for a nation full of empty structures. All of us white collar workers will have to learn to grow our own food if we want to have something to eat, and if we want to possess a commodity that we can barter. The only way to have fuel in the winter will be to produce food in the summer. Maybe more of us will take up hunting, assuming we have something to trade for the bullets and the guns. Now that I think about it, a thinning of the deer population around my house would be one positive outcome of the total unraveling of our economy.

If we have nothing to barter with, we won't have any gas for our cars. We'll walk everywhere, or use what public transportation is available (I assume the government will try to put people to work by trading surplus grain and cheese for labor). The end of our economy would be good for the environment not only because we would of necessity produce as much of our own food as possible, thereby ending agribusiness, but also because we'd stop burning so much fossil fuel. With nothing to trade for heating oil or gas or for electricity, those of us with fireplaces would gather wood and brush to burn, ending the production of yard waste. Waste in general would be a thing of the past. Cans and bottles would also once again become commodities, things to be reused rather than discarded.

Without money, we'd end up knowing each other better, more intimately. Electricity is a commodity that will be available only to those who can generate it themselves or trade something for it. Until the day that each of us has our own solar panel and/or windmill, or some sort of hydroelectric system, we'll live with periods of darkness when we can't afford to power our computers and televisions. We'll turn to each other for entertainment and information, we'll rely on personal interactions. We'll live closer together in order to have access to information and resources, thereby ending sprawl.

Sure, life would be harder, much as it was harder hundreds or thousands of years ago. Access to medicine and education would be limited. The rule of law would be harder to enforce. In many ways, it would suck. But if money was worthless, I would never have to spend another day like this one, thinking about the fact that I need to find a job.

Shop, Baby, Shop

The press has a big story this holiday season, and it's all about how we aren't shopping. I don't need Slate or The New Yorker to tell me that the aisles of luxury retailers are empty; a look at my investment statements will tell me all I need to know about anyone's desire to purchase almost anything this Christmas. Nearly everyone I know has either declared a moratorium on gifts or has suddenly discovered the joys of crafts (I haven't researched this, but I would bet that knitting has become a rediscovered pastime). My experience the past few days tells me, though, that people are in fact shopping like crazy. They just aren't shopping at Bergdof's.

In search of a disposable yet presentable platter to take to a pot-luck, I visited two dollar stores on Saturday. The first store stocked no cheap platters of any kind, which didn't deter anyone but me: the place was mobbed. For some reason only one register was open, and the checkout line stretched, no exaggeration, the entire length of the store. This particular place isn't even a very good dollar store, in that very little actually costs a dollar and in that most of their stuff is so off-brand it's a little scary. I next went to my favorite dollar store, where things actually do cost a dollar and where the merchandise looks a little less questionable. Again, the place was mobbed; I got the last available space in the lot, and had to fight my way through the aisles to find my cheap platter and a plush toy for Brody to spend Christmas morning (or at least five minutes of it) disemboweling.

Another place people are shopping is the thrift store. A friend and I went to both thrift stores in town this morning, both of which were hopping. In my experience, the thrift store is always pretty crowded on Saturdays, but this was 10:30 on a Monday morning. Why wasn't everyone at work? Oh, right. Sorry.

What seems clear to me is that everyone wants to spend money, they just don't feel like they have much to spend. It's too bad those stimulus checks went out last May and June, because had they arrived last week, we might see a few more people buying a thing or two priced above, say, five bucks. I'm no economist, but I do know what I see. Americans are shopping. We're just not shopping at the retailers tracked by Wall Street and the media.

The $13 Flight Takes Off

Cheapie Irish airline Ryanair announced last week that it plans to offer service from it's base outside London to New York, Boston, LA, San Francisco, and some as yet undetermined cities in Florida. The cost? Ten euros, currently around 13 bucks. I'm assuming that's one way, but still, that seems too good to be true. Of course, this apparently is too good to be true, since Ryanair charges fees for everything from checking in at a counter to speaking with an agent. Add in the fees and you still have a round-trip flight to England for, say, a hundred bucks. Is it worth it?

I've never flown Ryanair, but apparently it out-budgets American budget haulers. The windows don't have shades, the seats don't recline, there's no back pocket in which to stuff smelly sandwiches and boring magazines, and you have to put up with a live version of QVC for the duration of your flight, with attendants hawking everything from beverages and meals to jewlery, watches, and George Foreman grills. OK, the George Foreman grills might be stretching it, but you see my point.

If you're hopping from one European city to another all of this is probably an inconvenience you'll put up with for an hour or two in order to get to your destination cheaply. The question becomes whether enough consumers will be willing to fly for at least six hours without being able to recline their seat, and with what amounts to a live auction going on in front of them. Yes, suddenly we're all poor, and maybe this will be the only way any of us can afford international travel for the next couple of years, if we can afford it at all. On the other hand, maybe I'm just too old for this kind of crap, because I think I'd rather stay home or take a cheap flight to Ft. Lauderdale than spend that number of hours trapped upright in a small seat breathing bad air.

No start date for the service has been announced, because Ryanair has yet to purchase the needed planes. Once it's up and running, we'll see what the market will bear, and how frugal the American consumer can really be.

It's the Stupid, Economy

I read stories about our economic woes in every morning's papers. Everything costs more than it did a year ago, it's a bear market, we're in a recession, blah, blah, blah. Besides annoyance every time I fill my tank, I don't really notice many changes in or around me. My friends and I are all living our lives just the same as we have been; no one has been laid off, no one is entering foreclosure, no one is eating cat food. It took a weekend at the shore to really see the economic downturn in action.

On the macro level, boom and bust were evident everywhere in Wildwood. I have no prior knowledge of the island, but the remnants of the recent housing boom were readily observable. It was clear that the Wildwoods were a working-class resort; most of the housing consisted of modest beach cottages. Many of those cottages had been recently renovated; many of them had been torn down and replaced with larger structures: long, narrow, three or four story multi-unit condos. I didn't walk down a single block that didn't feature a plethora of "For Sale" or "For Rent" signs. Had I awakened yesterday morning with a sudden desire to rent a house or a condo and stay for the week, I could have had my choice of rentals. Investment in Wildwood real estate had clearly been rampant for at least several years, and those investments were now clearly lying fallow.

Had I driven down Friday on a whim, I also could have had my choice of motel rooms for the weekend. Driving around Friday night, a "No Vacancy" sign was the aberration, not the norm. The motels that had vacancies weren't those on the bay, or four blocks from the beach, or those that looked sketchy. Even oceanfront motels had vacancies aplenty. From what I can tell Wildwood is not an expensive resort. An efficiency suite that sleeps four at an oceanfront motel, with balcony with ocean view, went for $195 a night in this, the high season. The number of vacancies would seem to indicate that even a weekend at a beach less than a tank of gas away is beyond the reach of many this summer.

This was proven at the micro level. All weekend the day parking lots and the beach were relatively full. Wildwood's beaches are free, so for a nominal parking fee a family can have a day by the ocean. Although the boardwalk had plenty of pedestrians, the shops and arcades were empty. As of 9 PM Friday night, the amusement parks didn't have enough takers for most of the rides, so that the roller coaster, ferris wheel, etc. were standing idle. People lined up for slices of pizza, but we were able to get a table at a seafood restaurant overlooking the bay without a reservation and only a half hour wait. This summer, a day at the shore wouldn't seem to include any extras.

For Sunday happy hour we drove to a motel that had a swim-up tiki bar. A DJ was set up in a corner for karoke, but no one was singing; the bar had fewer than a dozen patrons on this sunny weekend day. You know things are bad when no one's drinking at the Jersey shore.

The good news was a painless weekend away, when we could get tables without reservations and get a seat at any bar we desired. The bad news is the way business, even in this resort area, is suffering, the wait staff who aren't making the tips they need, the business owners who perhaps aren't covering expenses, the homeowners who can't rent or sell. And the bad news is that it's summer. In August, no one is paying to heat their home. What will it be like in January, even for me, when my heating bill is almost as much each month as my mortgage?

I guess it's a good thing I feed my cat nutritional high-protein food. Maybe we'll be sharing it come January.

Feline Update

I'm on a "staycation," which is how the talking heads are trying to spin the fact that no one can afford to leave home this summer, which means that vacation time is spent in one's own backyard. In other words, I'm not working this week, except for the occasional meeting or two. So instead of a real post, here's a short update:

I was in fact inadvertently starving my cat. We went back to the vet yesterday to get him weighed, and with the increase in food he's put on half a pound in the past five weeks. Why the same amount of food he'd been give for the past 2.5 years suddenly became insufficient remains a mystery, but as long as he's putting on weight I'm not shelling out for further tests.

He's certainly been a happier cat recently, although he still gets me up at first light to beg for food. That was at 5:13 this morning, in case you were wondering. A true staycation would involve locking my cat out of the house overnight, but not even I am that cruel.

Happy Tax Day!

Unless you're a vampire and have been around for 3,864 years, paying your taxes today feels inevitable. The federal government didn't always levy income taxes, though; until the Civil War, the government was funded completely by tariffs on imported goods. An income tax was created to fund the Civil War, but was rescinded in 1872. Federal income taxes as we know them didn't begin until 1913, with the ratification of the Sixteenth Amendment.

If, like me, you end up owing something every year, April 15 can be depressing indeed. Here are a few tidbits to cheer you up. Today, the tax rate tops out at 28%, and with deductions and the lower rate on capital gains and dividends, the wealthy among us pay less tax than ever. In 1916, the income tax wasn't progressive, and was instead a flat 1% on incomes between $3,000 and $500,000, with a surcharge of 6% for incomes over $500K. Tax rates increased and became progressive by 1918 to finance WWI, then decreased again during the 1920s, with the top rate bottoming out at 24% just before the crash.

Anyone lucky enough to be earning money during the Great Depression was taxed heavily on it, with the top rate reaching 63% by 1932. To finance WWII, the rate went even higher, to 94% on incomes over $200,000. The top rate stayed at around 90% until 1964, when it was lowered to 70%. It wasn't until Reagan's economic policies came into effect in the 1980s that the rates decreased to the levels we now all know and love.

We're not all rich, of course, and the tax rates for the middle-class haven't fluctuated as much as taxes on the wealthy. I'm glad I'm not taxed 90% of my income, but then again I doubt my income would have put me in that bracket. The total tax burden for most Americans, combining federal, state, and local or municipal taxes, is 40%. Look at all we get in return: chaos in Iraq, bailouts of troubled lenders, and $600 a person to spend at Wal-Mart.

Too bad we no longer impose tariffs on all that Wal-Mart merchandise that's been made in China.

Employment Journal, Part II

I only had a couple of hours to spend looking for work yesterday, so I limited my search to department stores on the theory that the larger stores might be more likely to need help. No such luck. I went to three different stores in two different malls and came home feeling slightly humiliated.

Things started badly at Store 1. After a fruitless search for either the manager's office or someone who could tell me where to find said office, I finally encountered an employee in the sock section. "Can you tell me where the manager's office might be?" I asked hopefully. She looked me over and quickly replied, "You won't be hired." Although I wasn't wearing a business suit I was fully clothed and my fly was not open, so I have no idea where that hostility came from. "I'd like to try anyway," I said, and she begrudgingly sent me on my way.

In the manager's office I waited 15 minutes for a 22 year-old to get off the phone and was handed an application. I filled it out while she made several more phone calls. The application asked for the address and phone number of my high school. I had no idea this was information that would be pertinent in life. When she got off the phone 20 minutes later, I handed her my application and asked if they were hiring. "I don't think so," she replied. "The manager will call you, maybe, but you should come back later in the summer when we hire for the holidays." OK, off to Store 2.

There, I easily found the office and was immediately handed an application. I again needed to know the address and phone number of my high school. This time I was also handed a true or false questionnaire: All merchandise on the premises is the property of Store 2 - true or false? I'm thinking I passed. I handed my materials to the man behind the counter and asked if they were hiring. He read over my application, looked at me, and said, "We don't handle headquarters. You have to apply to corporate." I told him I was looking for a job on the floor, to which he replied, "Oh?" Silence. He finally told me that they'd keep my application on file and someone might call me.

Store 3 was much the same, only this time I spoke with the actual store manager, who read my application and opined, "Well, you have lots of....experience. Are you sure you want to work here?" I explained that I just really needed a job. She in turn explained that Store 3 prefers to hire "career workers," and that it didn't look as if I'd want to make Store 3 my career. So I don't think I'll be hearing from her.

In short, I don't appear to be the kind of worker department stores are looking for, although I got the sense that they aren't looking for any kind of employee right now. I'll return to the malls and see if any of the smaller retailers are hiring at a later date. I won't have time to look for work today - my real jobs beckon - but later this week I think I'll give some restaurants a try.

How Do You Spell Recession?

How do you know when you're in the middle of a recession? Is it a sign when your investments would be doing better stuffed under your mattress than they are in the market? Is it a sign when your home is worth less every day? Is it a sign when anyone unlucky enough to be out of work will be out of work for some time to come? How about when Bear, Stearns goes under? None of these has led the Bush administration to admit that we're in a recession. Maybe a study of some different evidence is in order.

My beloved but ugly jacket literally fell apart a week ago, so I thought I'd go to a department store or two to see if they had anything left in clearance. No luck there, it's the wrong season for winter coats. However, I discovered at the mall that each and every retailer is having a fire sale on each and every thing you don't need. 40-inch LCD HDTV? You can get one for under $1,000. Furniture? At least 30% off. Small electronics? Look hard enough and you'll find a blender for $9.99. If you don't need it, it's on sale. I'm no economist, but to me this makes obvious the following: no one is spending money right now. If we were spending money, there'd be no need to give away the store. If we were spending money, there'd be no need to send $600 of our taxes back to us in May.

My torn jacket and I left the mall to run some more errands, and the reasons why no one is buying what they don't need became abundantly clear. We all know how much gas costs these days so I won't narrate my trip to the pumps. I stopped for a slice of pizza in order to avoid grocery shopping while hungry (I made that mistake once and came home with three bags full of meat and no vegetables, bread, or fruit, just meat, so that's a mistake I won't make twice). You might not know this, but the price of wheat has recently skyrocketed, in part due to demand from China. Pizza crust is made from wheat. Nationally, the cost of a slice of pizza has increased 25% in the past month.

Milk, eggs, and produce prices have also risen recently, due in part to the cost of shipping the stuff halfway around the world. Increased grain prices will mean that poultry and beef will cost you more by the summer, assuming you purchase grain-fed meats. All this makes you need a drink, doesn't it? In January, California wines increased an average of $2 a bottle, due to increased production and shipping costs. A blender costs less than a bottle of wine.

No one needs the Federal Reserve to tell them what a simple shopping trip makes evident. When the things you need cost more and more, you can't afford the things you don't need. Inflation of necessities leads to deflation of luxuries. Six hundred bucks a person won't fix it. On the bright side, if you have some cash left after paying your heating bill, it's a great time to buy furniture.