Home Improvements Are Nearly Impossible

 We've had three home improvements projects in the works since August. One was replacement of an windowless exterior door with a new door with a window. The door was in stock (no "supply chain" problem), but it took until early December for the installation.

The second was conversion of a fireplace from wood-burning to gas log. The fireplace already had a gas supply, making it a "simple" project, except for the custom-built, and very expensive, glass/steel doors that had to be ordered. The installation was scheduled for before Thanksgiving, but we had to reschedule it for just after Christmas. The company called yesterday and said they'd had a cancellation and they could do our job today. Today, the installer appeared, set up the gas logs and burner, and discovered the custom-made doors were lacking the expected brackets to securely anchor it to the fireplace. So, he re-boxed the doors and they'll have to be shipped back to the factory for the brackets. No idea how long that will take.

The third and largest project is remodeling our main, circa 1977, bathroom; walk-in shower, widening of walk area so it can handle a wheelchair if/when needed, new toilet, etc. Back in August, the contractor for Home Depot projected installation in January, depending on them obtaining all the materials ahead of time. Today, we were updated that while they can't find the toilet they ordered, they reordered another toilet and will contact us in the next week to set a date in January to begin.

So after 4 months, one project was accomplished, one project is half accomplished, and one may begin 5 months after we started planning. It's exhausting, depressing, and frustrating. And the pandemic is blamed for 90% of these delays. I'm not so sure. Home improvements are not for the faint of heart.

What Happened To The Future?

Americans have always had faith in the future, that it would be better than the present, and way better than the past.   That's been the foundation for generations of Americans who believed that if they worked hard and focused on a goal, they could improve their lot in life as well as secure their children's future.  This notion has been used as a way to distinguish America from "those other countries" where economic mobility was difficult, if not impossible, to improve.

Apparently, that's not actually the case, and it's questionable if it ever was.  As recently reported on Marketplace, according to research conducted by Pew's Economic Mobility Project:

(the project) has calculated that about 60 percent of Americans whose fathers’ incomes were in the top fifth, stay in the top two-fifths themselves. And the same is true at the bottom. About 65 percent of those from the bottom fifth don't make it past the bottom two-fifths by the time they're adults.

What's this mean?  It means that your economic future looks pretty much the same as your father's was.   Whether you started at the bottom or the top of the economic ladder, you'll probably stay there.  

What could be worse than that?  Another researcher has compared the economic mobility, the ability to change your economic status, of Americans and citizens of other developed countries.  Guess what?   Our belief that we're better off than others in our ability to move up the ladder is unfounded as well

Miles Corak is an economist at the University of Ottawa. He's compared the U.S. to other rich countries, and found that Americans have less mobility across generations than Canada, Australia, and most of Europe.

I find this research very disturbing, both from the standpoint that our children seem to be trapped in whatever economic rung of the ladder that their parents occupy (of course, it's not so much "trapped" if you're nearer the top rung), as well as the realization that the United States, land of opportunity, offers less economic opportunity than most of Europe.

Has our "future" changed or was it an illusion all along?

Fracking-NIMBY

You know all that controversy about fracking to retrieve oil and natural gas from shale deposits?   It's a process where drillers pump chemicals, water, and sand into underground deposits to break up the rock and force gas to the surface to be collected.

Fracking has come to suburbia.   This 12/27/11 Marketplace story explains that because many States have no laws either authorizing municipalities to regulate drilling within their boundaries or banning such regulation, companies are now installing drilling rigs in residential neighborhoods.  Suburban sub-divisions!

According to the story, "companies only need to maintain a set-back of 150 feet when putting up rigs near homes. It's the minimum clearance needed to avoid damage -- in case the rig tips over."   

I suspect that the rig tipping over is the least concern of most homeowners, considering the largely unknown side-effects of the chemicals used and the impact on the environment (e.g., underground water supplies).   How would you like a derrick 150 feet from your house?  That would probably be a great, big, NIMBY.

Gasoline Coupon

As the average price of gasoline in the US edges over $4/gallon, Americans are beginning cast about for ways to deal with it.  One of those ways, is engaging in what some might call "gallows humor."   The following was sent to me by a friend as an email.  I don't know if the email will translate well to a blog post, but I found it to be pretty darn funny and wanted to share it.  The biggest alteration is that in the email, you had to scroll down quite a bit to see the coupon...

Gasoline Coupon

I didn't realize it, but these coupons are good for one gallon of gas at most retailers.  I have seen them around, but until recently never took advantage of them, I never realized their actual worth.

You probably have one or two just lying around somewhere; now is the time to use them before they lose their value, and it's too late!!


SEE COUPON BELOW...

Democracy For All! Except...

The ability of a people to control their own destiny, generally includes the right to band together for mutual support and assistance.   Like forming a union to bargain for employment rights.  Or demanding a dictator leave the country.  The 'crisis du jour' among the Republicants this year seems to be blaming the current economic disaster on the middle class and public employee unions, rather than the riverboat gambler bankers of Wall Street.

So it's interesting to view what's going on in the Middle East side by side with what's going on in a number of States  (Wisconsin, Indiana, Ohio) around this country regarding the efforts to strip collective bargaining rights from public employees.  This effort purports to be for the purpose of needing to "balance the State budget."   In fact, union contracts for public employees have nothing to do with State budget imbalances, which are mostly caused by the current economy and the collapse of tax revenues.

It's ironic that the nation is hand-wringing over the poor demonstrators across the middle East who are oppressed by those nasty dictators, while the democratic process is being defiled around this country by zealots bent on destroying the ability of employees to band together for their benefit and protection.   Hypocritical to say the least.

Cartoon by Clay Bennett of the Chattanooga Times

 

Quantitative Easing Explained

You may not know whether to laugh or cry when you watch and hear this video. Gotta love a computer voice saying things like "shit hit the fan."  

This video covers a lot of territory about what the Federal Reserve is up to and why.  And who benefits most.   Clue: it's not you and me.

Here's the video.

Will The Economy Get Better-Part 2

Well, since my post on this topic in April, not much has changed.   Unemployment rates are still high, new job creation is elusive, the wars in Afghanistan and Iraq grind on, and  political fringe elements in the U.S. are louder and shriller.  Based purely on anecdotal evidence, people hate their jobs more.   I think this "Moderately Confused" comic sums it all up.  This comic is always quite "pithy" and you can find the strips here.

Will the economy get better?

One of the signs of a lousy economy is that those who have jobs are willing to endure things they wouldn't have a few years ago in order to keep their jobs.   This is perhaps one of the reasons that productivity levels in the US have stengthened during this Recession.   Simply put, fewer workers are performing more work, which makes them more productive.   Less happy, more tired, more stressed, but more productive.    At some point, one would hope, the economy will improve to the point that employers will resume hiring and those already working will be able to have slightly smaller workloads.   I suspect that won't happen soon, because employers won't become nicer until they have to.   

This comic puts the concept of making employees happy in perspective.

More U.S. Jobs Lost

Well, another American company has decided to "reduce expenses" and is closing down a local call center in favor of outsourcing the operation.  Redbox is the outfit that maintains soda machine size vending machines all around the country, at which you can rent $1 videos.  The business model is killing Blockbuster and even attracting attention from Netflix. 

While news reports aren't specific about the plan, it's not a big stretch to conclude that "outsourcing" means "off-shoring."  The loss of Illinois jobs will be probably be matched by an increase of jobs in Manila, Bangalore, or Singapore.  The number of jobs involved isn't huge, about 200, but this is a company that is making money and planning expansion at the same time they're laying off employees. 

To those who say that this is "good business decision" and it's just "global economics," all I can say is that's baloney.   The global economy does not have to be the only game in town.   If we as Americans want to preserve jobs and livelihoods of Americans, we need to start complaining loudly when companies treat us like this.   Especially when the company, like Redbox, is making money.  At the very least, American workers (those that are still employed) should not be patronizing such businesses.  As long as we just take this abusive corporate behavior without complaint, the employment opportunities will just get worse.

If you'd like to express your lack of appreciation to Redbox, drop them an email.

Is Growth Limitless?

One of the many things I don't understand about economics and our national economy, is the notion of "growth." It seems as though everything in our economy is based on this concept, whether it's how many retail outlets a business has, how much market share a bank has, the value of a specific stock, consumerism in general, or or just plain old sales figures. If you don't have growth, you're in trouble.

One symptom of this growth focus is our institutionalized expectation that a corporation's prime responsibility to shareholders is to grow the share value (i.e., the stock price must go up). The company is not expected to focus on making a profit to share with shareholders (dividend distribution) or even to produce something useful (products or services someone wants to buy). IMO, this has made the stock markets more akin to riverboat gambling than financial analysis.

The problem for me is that economic growth doesn't seem to have unlimited potential in the broadest sense. There are a lot of other societal factors that are also tied into growth, such as population growth. Continuous growth in our economy seems to require continuous growth in other areas, such as population. If you base your economic model on growth, it seems like you are also dependent on unlimited population growth, unlimited ability to grow food, unlimited ability to provide health care, etc. Back in the 18th, 19th, or even the first half of the 20th centuries, a continuous growth model might actually have made sense, but I question that it makes sense in the 21st century.

Back in the 1960s, there was a lot of talk about ZPG, or Zero Population Growth, and how our planet had finite resources and was not able to support an unlimited number of humans. There was even a movie made in 1972 called ZPG. Somewhere in the passage of time, the ZPG message was left along the wayside (remember them?) and seems to be no longer a major concern for most folks. But I think the way our economy has been structured for many, many years, it depends on unlimited population growth to provide new consumers and new people to use "stuff." I don't think this model is sustainable, and I'm wondering if there are mainstream economists out there who have discussed economic models that don't depend on permanent growth.

A recent interview (9/9/09) on Marketplace.org with Michael Mandel of Business Week, touches on some of this. In a recent blog and the interview, Mandel points out that the American notion of the "consumer economy" is badly distorted. A common "given" is that 70% of our economy is composed of consumer spending, and with the financial health of our nation dependent on so much consuming, how can we change anything? If consumers are convinced we shouldn't use up stuff so much, our economy will continue to deteriorate rather than recover, etc. If we continue to use up stuff as in the past, the world's resources will be depleted, with horrendous results.

Mandel studied the numbers and concluded that the US Commerce Department, Bureau of Economic Analysis, came up with the 70% Gross Domestic Product (GDP) figure based on some curious assumptions. A lot of expenditures most of us don't consider consumer spending are included, and a lot of expenditures you might think are consumer spending aren't. Medical spending is an interesting example: while you might think Medicare spending is government spending, the BEA counts it as consumer spending. Mandel's calculations conclude that maybe about 40% of our economy is consumer spending. And since that's a hugely smaller number than the 70% that's bandied about, it's very significant. It means, in Mandel's view, that we don't have to be a consumer driven economy.

And that means that we as citizens could actually have more control over our environment and lives in general, if we were not just one of millions of consumers. We could redirect our national resources away from unlimited consumption and toward a more sustainable economic model. Whatever that might be.

Mandel's interview skirts around the edges of the growth question when he stated that "we don't have to be a consumer-driven economy." What would be an alternative to a consumer-driven economy? Think about that for a bit.

A "Marketplace" Home Run

These days, I find myself getting more of my news from the American Public Media program Marketplace, on National Public Radio, than from anywhere else. The show is self-described as "a program which looks at the entire world through the lenses of business, economics and finance." It's not just about money. I pride myself for being a liberal arts major, and I think I managed to take just a single economics course in college way back when. Marketplace puts all those "business" topics into easily understood terms, even for liberal arts majors.

IMO, Marketplace hit a home run on Monday 6/29/09. The entire program was filled with worthwhile, and in some cases, uplifting stories. Even if you don't normally listen to this program, if you have any interest in history or what's going on around us these days, I urge you to either download the podcast or read the text of the stories for 6/29; it will be a half hour well-spent. The link for the show is here. The stories include:

• Victims of Madoff react to his sentence of 150 years in prison
• Toxic assets are still looming in the murk (and some banks don't want to sell them per the Fed plan)
• Fee hikes rise for debit cards
• Nigerian oil production disruptions due to rebel attacks (and why they're not affecting our gas prices very much)
  
• Fireworks shows and how many communities can't afford them this year (this is the uplifting one)
• Michael Lewis on the fall of Wall Street (the author mentions that government watchdogs still haven't actually spoken with the people at AIG who caused much of the chaos)
• Debt wasn't always the enemy (how the GI bill after WWII helped expand the middle class and home ownership in the US)

The article about fee hikes might cause some people to complain once again about those damn banks, but this one is a little different. Seems some folks over the years have treated debit cards less like checkbooks and more like credit cards. Since debit cards are linked directly to your checking account, you're not supposed to use it if you don't have the cash to cover it, and banks weren't supposed to let you use it if you lacked the cash. Seems the rules changed several years ago, and many banks now let you use the debit card even if you don't have the bucks to back up the transaction. Who woulda thunk?! Now, with looming limits on credit card interest, banks are imposing higher fees on those "overdraft" debit transactions. First thought: if you're nuts enough to not keep track of how much cash you have in your checking account, you deserve whatever fees the bank may impose on the privilege of overdrafting with a debit card. I don't have the same kind of sympathy for these people as I do for those being charged 20-30% interest on credit card debt.

The interview with Michael Lewis and what's still wrong with Wall Street includes the assertion that we still have not actually dealt with much of the underlying problem, and that there will be a "greater reckoning down the road" (i.e., more economic collapse before we're done with the Depression/Recession). One of Lewis' main observations is that when he went to interview people, like at AIG (the people who "actually know what happened") he's the first person they've talked to. That is, no one from Treasury or the NYS insurance regulators had "showed." He calls that amazing, I call it nonfeasance at best, and malfeasance at worst.

The 6/29/09 program is here. You can read the segments or listen to the podcast. Either way, these stories are eye-openers.