My new favorite Democrat

My new favorite Democrat in the US of A just happens to represent my hometown. Nick Gautreaux of Abbeville has proposed to eliminate the personal income tax in Louisiana.

Gautreaux’s bill would keep in effect the tax rates and tax brackets on personal income taxes but would lower the amount paid by individuals by 10 percent a year until the tax is phased out by Jan. 1, 2016. For example, in the present tax year, taxpayers would pay 90 percent of their tax bills to the state and 80 percent next year.

But my favorite is this quote:

“This gives a break to the working-class people,” he said. “For the last several years we have had a surplus. . . . That tells me we are overtaxed. . . . It is time to give taxpayers a tax break. Why should government grow and add more and more programs?”

Can someone get Howard Dean on the phone? This guy needs to sit down with Nancy Pelosi and company and set them straight.

When the dollar talks back

When the dollar talks back – Opinion – International Herald Tribune

I guess that the joyride can’t last forever – at some point you’ve gotta pay the tab. As my dad is fond of saying, “There ain’t no free lunch.”

We’ve already seen that this government will do anything to ensure dollar hegemony, but there are forces here that may be unstoppable. This administration has pursued a fiscal policy that is clearly unsustainable – while at the same time, allowing the rise of a formidable currency competitor in the Euro.

A run on the bank is hard to stop . . .

Milton Friedman, R.I.P.

One of his last interviews linked above. So rarely do I shake my head yes during an interview!

Constitution quote

A good quote not to be buried in a comments section.

From Hayek, …”the arrogation of arbitrary powers by Parliament was regarded by the spokesman of the American colonies as the ultimate cause of te break with the mother country. This was most clearly expressed by one of the profoundest of their political philosophers, James Wilson, who

‘rejected Blackstone’s doctrine of parliamentary sovereignty as outmoded. The British do not understand the idea of a constitution which limits and superintends the operations of the legislature. This was an improvement in the science of government reserved to the Americans.

Back to Hayek, “We shall not further consider here the American attempt to limit in their Constitution the powers of the legislature, and its limited success. It in fact did no more to prevent Congress from becoming primarily a governmental rater than a truly legislative institution…

Sadly he is right. The root of the problem is not private influence of government, but rather the unlimited nature of our government.

Rules of the game

I recently spoke with a brilliant young man with a somewhat lucrative job; he only had to work for three months out of the year and spent the rest of the time traveling to Europe and telling friends and college students how great his job was. Just a couple of years out of college and had little savings and no credit card. I talked with him a little bit about the rules of the game that big institutions, like banks and the IRS, set up for peons like us to follow. He asked me if there were some book he could read so he could know what the rules were.

Well, there are some books out there, usually published by modern-day get-rich televangelists, and these investevangelists have the same purpose as ordinary televangelists, that is, to seperate fools from their money. At best they want you to buy their book, at worst there are 200$ board games and 1500$ seminars to attend. I’ve always felt these talks were helpful but I never want to pay a dime for them. Similarly, I felt I learned a lot about big business when I attended an Amway meeting, at the ripe age of 17. However, I didn’t want to invest the time or money (I didn’t have any!) trying to persuade others to invest their time and money etc. etc.

A good barometer for the legitimacy of the investevangelist is their promixity to Amway and other pyramid schemes. Suze Orman, for example, has an audience participation part of her programs. Often these audience members stand up and talk about how they ruined their credit buying tons of stuff in an attempt to get rich off of some pyramid scheme, and she has often set these people straight. On the other hand, Robert Kiyosaki does not distance himself from the pyramid schemes as he wants their business.

Probably the most reasonable of the investevangelists is David Bach, who writes and talks about the “latte factor”.

If anyone wants to learn about the mindset and techniques of getting rich, you can easily get a copy of their work at the local library. Usually it is in CD, Video, or book format. At it’s worst this kind of stuff is still more educational, and has fewer plot twists, than an episode of 24 or Lost. But, most likely, if you find someone successful in business, you can find out pretty much everything you need to know from them that are covered in these infotainment shows. Although I am not rich or wealthy, not even a success story yet really, I’ve made some mistakes and learned from them and have a plan that doesn’t deviate from these guys too much. And as a one time offer I will void the logipundit gold member subscription fee (50$/month) required for this special money making content guaranteed to double or triple your income within the next ten years. You’ve heard of Donald Trump and Warren Buffett right? Don’t you want to learn their secrets? Well just keep reading silly, and you’ll find out the true secret to ultimate riches.

Rule #1.
(Are you ready)

(Drum roll)

What did you expect? People will just give you money for nothing? Think everyone can just flip houses for a living with a zero $ down payment? What planet are you on? Sure, this can work, if you make a full time job out of doing your homework of knowing the neighborhood you are buying in, knowing what is a good house, catching any problems, and knowing the demographics of customers, this might work. Flipping houses also might work in a big city like NYC or DC, but less likely in the “Columbus metropolitan area”, and for most of the heartland. By the way, anyone interested in a 1200 square foot 2 bedroom home for $300,000 here in Columbus? It’s only about 30 years old.Yeah, I didn’t think so.

Ok ready for Rule #2



In today’s society, there are simply too many benefits to carrying a credit card. Having a line of credit is something banks look for when you buy a car or home. Old school of thought was that you buy everything with cash on the barrelhead, but it is unheard of to cash out a house these days. Having a line of credit for a long time tells banks that you are playing the game and not sitting on the sidelines. Also, good luck getting a plane ticket, renting a car, and getting a hotel room with your debit card.

Another old school way of thinking, which is really admirable, honestly, is to just keep the credit card for emergencies. Unfortunately, it kind of works out that you should spend a good bit on your credit card and pay it off at the end of the month. The trick is not to put more on your credit card than you can afford to pay off at once. Pay off your credit card at the end of every month all the way down to zero. Pretty soon you can get dividends and frequent flyer miles, we got a $300 of dividend from our credit card, which was basically 1% to 5% of our purchases sent back to us, spending money on stuff we were going to buy anyway.

Also, using the credit card in this way helps you itemize your purchases, which can help you come tax time.

Ok now time for the big one:

Rule #3: Don’t eat out if you can cook it yourself.
Ok, this one’s real metaphorical. But seriously, when YJ and I take an opportunity to eat out, we aren’t going to eat omelettes, spaghetti, or anything with chicken. These are staples of our diet. I am the omelette master, and I’ve calculated the price per omelette of my one-of-a kind masterpieces. For a kickass omelette it costs ~$1.50. Why would I pay $7.50 for something I can do better myself? I know many eligible bachelors are saying, “Ha, I can’t cook anything”. Well, I hope you enjoy microwave pizza. Get some Ragu and learn to boil noodles, or else pay 6+$ per meal to someone else. Or, ask your Mom how to cook something.

But the cook it yourself principle applies to many aspects of life, specifically investments. I used to invest in Edward Jones, and was pretty passive about the process. Well, after getting my savings thoroughly trashed at the hands of a trusted investment specialist, I took charge of my own money and did substantially better at a no frills investment house than going with $50 per transaction investment gatekeepers. I estimate I gained about 10% in a bull market, and I’m skeptical, really, about how I can do in a Bear market. But probably betting on big blue chips with fat dividends is a good start. Anyway, as our fellow contributor Reagan Gahagan attests, Citibank and others are getting aggressive about offering 5% savings accounts, which is better than nothing and is FDIC.

We plan on taking the same approach to buying a house when the time comes (i.e. when we leave Columbus). Hopefully soon it will be just as easy to buy a house as a stock.

Update ( I got a little tired at the end there. Of course buying a house will never be as easy as buying a stock. I am trying to allude to the shift from using the services of a gatekeeper (realtors and real estate agents) to using online resources, which should drive down the hassle and cost of buying a home some.

Posted at 10:46 pm by Johnny B

Posted by BP @ 08/07/2006 09:25 AM PDT
You mentioned “investevangelists”…that’s a great word and I don’t think I’ve heard it. The worst example is Suze Orman…who gave up her licenses a few years back so she couldn’t be sued for giving bad financial advise.

So how do I join your system? Can I get started without any money?

Outsourcing Fast Food?

I could see that as the next logical step

Posted at 10:49 pm by Johnny B

Horrendous wage gougers

Thursday, November 17, 2005
Horrendous wage gougers
Seriously, these people rebuilding New Orleans should be brought before a Senate committee pronto. How dare they demand higher wages for their work simply because the market allows it. There should be some kind of law against this. An interesting take here.

Posted at 06:57 pm by Johnny B

Posted by Jordan @ 11/18/2005 02:43 PM PST
Nice post, Johnny!
Excesses of the market, gotta love ’em.