Archive for October 11th, 2008
Here’s a peek at Robert Downey Jr. as Sherlock Holmes! Guy Ritchie, RDJ and the Sherlock Holmes crew were on location at St. Paul’s Cathedral in London on Friday filming a few scenes for the flick. For a minute we thought the pic was from RDJ’s Charlie Chaplain days! [Image via Getty Images.] No tags for this post.You heard the song, now you can watch the video. [Last week, I brought you the first edition of my Weekly Love List, but as the Backstreet Boys song says (and yes I am actually quoting them) “My Love is All I Have To Give.” So with that, here are this week’s list-worthy things…] I’ve been attending a yoga class at the gym. I joined it so I could learn to get in touch with myself and relax and destress after a long day. I’m not really sure when I got out of touch with myself, but it sounds very zen and enlightened to say things like, “I just [...] I sincerely hope you’ve heard of the band Jack’s Mannequin. And if not, at least say you’ve heard of Something Corporate, the lead singer’s first musical venture. If you’re still drawing a blank, then listen up!
Oct
11
2008
How Can We Save Our Debt-Swamped Government? [Your Government]Posted by: justd in consumerist
Calm down, Jim. You too can escape from debt by following a few basic budgeting principles. Let’s take at look the government’s budget and see if can’t benefit from some personal finance wisdom. Take the scale down a couple thousand notches and the United States Government is like a divorced father working to make ends meet. The poor guy makes about $30,000 per year and grapples with a seemingly inescapable debt of $90,000. Instead of paying down the debt’s principle, he spends slightly beyond his means, about $32,880 each year, ensuring that that his coffers won’t overflow anytime soon. Each year, he sits down and writes out a detailed five-year budget that always puts him in the black towards the end. He promises to start paying down the debt then, but in practice, the extra cash never materializes. It’s not that he doesn’t have good intentions. His spending is just too unwieldy. He has two types of expenditures: personal and court mandated. His personal expenses are the basics. He pays for rent and food, and the occasional beer at the neighborhood bar. Nothing too extravagant. It’s becoming tougher to justify those little luxuries as his other expenses have grown. By order of the court, he must pay his ex-wife significant alimony, plus child-support for their growing kid. He could save money by eating out less or watching the game from home instead of heading to the bar for a pint, but those unpopular choices wouldn’t make anybody happy. These are the pretty much the choices facing the U.S. government, but on a drastically larger scale. How Much Do We Owe? The U.S. debt is huge. The interest payments alone cost more than $400 billion. China is our Master Card and Japan is our Visa. As a society, we owe them $2 trillion, plus interest. And every single day, we borrow another $1.5 billion. What’s All This I Hear About A Deficit? Is That The Debt? No. The deficit is our yearly contribution to the debt. When politicians talk about slashing the deficit, they mean that *this year* we will still add to the national debt, but maybe not as much as we thought. Presidents habitually propose “balanced” budgets that slash deficits year after year, ending with a balanced budget after five years. Ignoring the fact that Presidential terms are four years, those proposals mean that the government will continue to add to the debt for every year except the last, when we will contribute nothing to debt, but won’t do anything to reduce it either. When the government spends less than it receives, we have a surplus. This is rare. Surpluses come with the same choices as holiday bonuses. You can blow them on iPods (or F-22 Raptors,) or pay off your student loans and credit card bills (or Social Security.) Why Is The Planet’s Wealthiest Nation In Debt? Just like our hypothetical divorced father, the U.S. has two types of expenses: discretionary and mandatory. Discretionary spending accounts for one third of our budget and funds all the those nice little things that we want, but aren’t required to fund. This encompasses most agencies you know about, like the Pentagon and the Departments of Agriculture, Education, State, Labor, Justice, Transportation, Commerce, and Homeland Security. All of it is nice, but if Congress wanted, it could quickly swing the legislative mace and kill off the FBI and the Navy. Discretionary spending is also the source of those pork barrel projects that get Senator McCain in such a huff. Technically, pork barrel projects benefit the residents of one Congressional district—think of that spiffy new park down the street—rather than further any national aim. In a budget of nearly $3 trillion, they cost around $18 billion. The vast majority of the federal budget is eaten up by the mandatory spending that funds our social safety net. The big entitlements are Social Security, Medicare, and Medicaid. The cost of entitlements is driven by the number of eligible citizens, rather than the annual Congressional appropriations process. To our divorced father, they are the court-ordered child support payments. Congress has the ability to tweak entitlement program eligibility, or scrap them altogether, but politicians don’t like futzing with our entitlements because it’s one of the easiest ways to get fired. Don’t Mention The War! You may have noticed, we’re at war. The wars in Iraq and Afghanistan add to our national debt, but not to our deficit. How? Emergency spending. Congress doesn’t have a rainy day fund like most responsible families. When the United States’ car breaks or we have an unexpected health scare, Congress waives its few existing budget rules and appropriates emergency funds, adding to the debt like any normal expense. For those keeping track, the wars have added almost half a trillion dollars to the debt. Even in peacetime the Pentagon guzzles nearly half a trillion dollars annually for its operating budget. The defense budget is so large that it was one of the only points of reference for the recent $700 billion bailout. Ok, Debt Is Bad. How Do We Reduce It? If our hypothetical divorced father can reduce his debt, so can the government.
Acknowledge The Problem: Hmm, well, we kinda have this one covered. Maybe you remember that Perot fellow, the one with the ears and the oil who loved talking about our debt? He got it. Some of our politicians get it, but Oh! New Program! WANT! -sigh- Stop Digging: This means balanced budgets. The government won’t ever pay off its massive debt unless it stops sending more than it takes in year after year. Balanced budgets are only the first step. We really need more money. Make Small Cutbacks: Um, yeah. Whole think tanks devote their time to finding “small cutbacks” that might save a little cash. If the government really was a divorced father, we’d point him to our post: 5 Expenses You Can’t Afford If You Have Credit Card Debt. Start An Emergency Fund: Lockbox, anyone? This was one of the original ideas behind Social Security and Medicare: start a separate fund with a separate funding stream, and keep the big bad mess away from our annual operating budget. It didn’t take Congress long, those naughty little rascals, to figure out that the big box labeled “COOKIES - DO NOT TOUCH” was filled with yummy, yummy cookies, on which they’ve been feasting ever since. Now the trust funds, as the President likes to point out, are filled with IOUs. Whoops! You, however, are more disciplined than Congress, and have no excuse for failing to fund a rainy day fund. Snowball: You have an edge over the government in that you can start a debt snowball, paying off your smallest balances first and then applying your newfound cash to payoff the larger balances. The government doesn’t have “small” and “large” balances. They simply owe tons and tons of money. Revel in your superiority by reading our post: Use Snowball Method Spreadsheet To Pay Off Debts Make More Money: This means raising taxes, the government’s nearly exclusive source of income. Everyone, even people who want more government programs, hates paying taxes. There’s nothing pleasant about it. But it’s the only way the government can raise cash. We need to pay for all those nifty services like the Do Not Call List and the Pentagon. Spend Less: This means cutting services, like that Do Not Call List and Pentagon thing we like so much. Rarely can we agree on what to fund, let alone what to cut. In a budget of $3 trillion, canceling the government’s cable service doesn’t amount to much. The big dollar savings come from staunching the future cost of entitlements or scaling back defense spending, but good luck getting the needed votes in Congress. But Isn’t Some Debt Ok? Some debt is the natural byproduct of a healthy society that reinvests in its future. Just as student loans are investments to boost future earnings potential, the government funds projects that can improve society and the economy. We can all agree that the interstate system is rather spiffy. Economists bicker over how much debt relative to income is healthy for the economy, but most everyone accepts that a reasonable amount of debt—however much that may be—is alright, much in the same way that carrying a mortgage isn’t fundamentally bad. Public policy is the constant, painfully entertaining struggle to provide the right services at the right tax levels. When you realize that cutting spending means fewer police officers or raising the retirement age, and that making more money means raising your taxes, you begin to understand why we have a $10 trillion debt. What Can You Do To Reduce The Debt? The most important thing you can do is to keep paying your taxes. If you are feeling especially charitable, you can make a donation directly to the treasury. Make your check payable to the Bureau of the Public Debt, and in the memo section, write: “Gift to reduce the Debt Held by the Public.” Mail your check to: Attn: Dept G Budget of the United States Government [Government Printing Office]
   
Oct
11
2008
Melissa & Doug’s Sky High Customer Service [Above And Beyond]Posted by: justd in consumerist
It’s Above and Beyond, so you can guess how this ends. Tracey writes: My daughter got this set of toys for her birthday. These are heavy, solid wood toys; only the wheels and airplane propeller are plastic. She dropped the airplane on the floor and the metal pin that holds the wheels on broke and fell apart. We had the set for less than a month when it broke. Great work, Melissa & Doug!
   
Here’s the situation: Reader Bryan ordered an item from Adorama’s Amazon store. After the item shipped, he decided to change the shipping instructions so he could pick up his package at the UPS store. Amazon’s policies kept Adorama from changing the instructions on a shipped item, so, after apologizing, Adorama gave Bryan two options: a full refund, or once the item returned undelivered, they could re-ship the item with the right instructions. Bryan didn’t send us his original request, so we’ll start with Adorama’s response. The writing isn’t the clearest, but the content speaks for itself:
Brian responded: I don’t see why it being an amazon order changes anything. It’s MY package that I paid for, and paid shipping for. UPS is not able to deliver to my location, all I want is to be able to pick up the package THAT I PAID FOR. Make it happen, or I’m just returning all of it, and then you’ll be refunding my money. Right off the bat you can tell Bryan is trouble. “Make it happen?” Tell that to a waitress and you’ll rightly end up with a drink down your shirt. Let’s see how Paola responds:
Paola provided a direct explanation to Bryan’s question. Adorama’s contract with Amazon prevents them from changing the shipping address. Simple enough, but Bryan kept pushing: Well, I guess you just lost some money. I have NEVER had any issues with getting UPS to hold a package that I have bought from Amazon.
Another fairly direct response from Paola, and a way to avoid the problem in the future. Fine. How Bryan choose to advance his case? Please learn proper grammar and english. It would make your messages much easier to understand. At this point, Paola could have stopped responding. The substantive interaction was over. If we were in Paola’s place, we wouldn’t have been able to respond with anything approximating a polite response. And as we’ll see, advancing the conversation doesn’t help anyone, even if the intent is to help an unreasonable customer.
See, this is what I’m talking about. Re-read your last 2 messages. They are written poorly. “unfurtunaly” is spelled “unfortunately”. All this poor grammar and spelling lets me know is that the employees at this place are incompetent, and that I would never order anything from you again. No one is paying attention to my problem and I am NOT receiving “good customer service”. If I was receiving “good customer service”, my problem would have already been taken care of when I called yesterday. I can’t believe all this hassle is being put into this situation. All I want to do is pick up my package; this should not be an impossible task. You fail. I will never order anything from adorama again.
Yes. I am a teacher. I teach 4th grade, and they spell better than you and can complete sentences using proper punctuation. It reflects poorly on you and the company you work for. If you can’t do this, maybe this is the wrong job for you. You are doing NOTHING to help me. If you want to help me, offer to overnight me another camera with no restrictions on the package, so that I can pick it up at the UPS office. Sitting here and arguing with me does nothing to fix the problem. Today, I will be contacting any management/owners that I can get ahold of and informing them of the awful customer service I’ve received. If you can’t solve the problem and just type gibberish to me, then you are of no use in your current place of employment.
Can we all agree this is a reasonable solution? Paola offered to resend the item, possibly even waive the shipping. And she volunteered her manager’s number and rightly suggested that any third party might find Bryan’s behavior offensive. So how does Bryan respond to the olive branch? Wow. I have no clue what any of that says since your sentences are all run-ons and really really long. Go back to school. The situation deteriorates from there.
Spend less time telling me to be ‘born again’ and more time studying an English book. Religion is just a crutch for the weak.
I was happy today until I had to deal with you. And for some reason you decide to bring religion into this. I’m making phone calls right now, doing my best to make sure that you don’t have a job by the end of the day.
If you were Bryan, how would you characterize this interaction when you sent it to our tipline? What one point might you seize upon to sensationalize your story? Okay…. Here’s an awesome email exchange between an adorama.com camera customer service rep and myself. Yeah, I’m an asshole, but this ignorant woman actually suggested that I become “born again”. You sure got one thing right, Bryan. Clearly the exchange could have been handled better by everyone. The telecoms and other large companies use rigid customer service manuals to limit similar debacles. Their customer service is like Plinko: your complaint’s destiny is governed by its fall down a maddening decision tree. Bryan would have been dismissed with a simple: “We cannot accommodate your request at this time. Please be assured, your business is important to us.” We prefer companies where employees can treat us not just as consumers, but as people. When dealing with any company, always treat customer service representatives as you would want to be treated yourself. The whole Golden Rule thing and all. Not only is it common decency, but it’s the single best way to get exactly you want. (Photo: paolo màrgari)
   
Oct
11
2008
The Bailout Bill Helps Renters Keep Their Homes [Foreclosure]Posted by: justd in consumerist
Let’s dive into the text and see what renter protections Congress cooked up: SEC. 109. FORECLOSURE MITIGATION EFFORTS. Renters are explicitly allowed to keep any legal rental subsidies, so even if grandma’s nine-room penthouse Park Avenue suite is foreclosed, she can keep her rent-controlled rate of $32 per month. SEC. 110. ASSISTANCE TO HOMEOWNERS. The bailout bill is full of goodies to help keep people stay in their homes. If you’re facing eviction, read our post explaining the bailout bill, and then immediately call your local HUD office to discuss your options. Text of H.R. 1424: Emergency Economic Stabilization Act of 2008 [GovTrack]
   
Because we didn’t already have enough to worry about this week, the New York Times took a moment to remind us that recessions and crime go hand-in-hand. Consider:
Specifics can be depressing, so let’s turn to cheerful sociologist Richard Rosenfeld for encouragement in broad trends: “Every recession since the late ’50s has been associated with an increase in crime and, in particular, property crime and robbery, which would be most responsive to changes in economic conditions. Typically, there is a year lag between the economic change and crime rates.” Nearly 80 police departments say that the subprime meltdown is already boosting crime rates. In Santa Anna, foreclosed homes have been converted to playgrounds for gangs and whores. New York is enjoying record-low crime rates, even with 4,000 fewer officers than we had eight years ago. Of course, the police department is funded by tax revenue, and New York, more than most, depends on Wall Street for a double-digit chunk of budget grease. Former top cop Bill Bratton said:
Mayor Bloomberg disagrees and told the police to slash $94 million from this year’s budget. Next year, the cops are set to lose another $192 million. Of course, these social scientists don’t really know anything. Some think bad times and foreclosures lead to falling wages, unemployment, and crime. Others think crime is caused by the prosperity and gaudiness found in good times. So unlike the countless investors driving us inexorably towards recession and potential stabbings, you can take solace in the uncertainty. Keeping Wary Eye on Crime as Economy Sinks [The New York Times]
   
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The United States is $10.2 trillion in debt. Like countless Americans, our government has spent beyond its means and needs help getting back on its feet. We recently received a panicked email from White House Budget Director Jim Nussle…
Keep A Budget: Well at least this one is covered. We have a budget and we know exactly 
The Melissa & Doug toy company helped Tracey’s daughter pick up the pieces after she accidentally crashed her month-old block plane into the ground, breaking off the metal pin that held the wheels together. Tracey emailed Melissa & Doug to warn them that the broken pin could potentially cause a choking hazard. She quickly heard back from Chris, who told her that she could either receive a replacement toy or pick out a new one. Just in case something wasn’t in stock, he said, Tracey should pick out two toys…
Yes, our pro-consumer bias has limits. For instance, when a customer service representative tries to help you, don’t respond by telling them to “go back to school,” or that your fourth-grade class can “spell better.” Of the tens of thousands of tips you have sent us, this is one of the worst. Do not be this guy.
Great news for renters facing eviction due to foreclosure: any mortgage owner seeking assistance under Congress’ mammoth bailout bill is required to let paying renters stay in their homes.
The global economy is crashing, credit markets are playing ice age, and you consumers have a simple choice: buy things now or prepare to be stabbed next year.
