Tuesday, January 5, 2010
Why does the federal government bother with a budget?
A good question to be asked, since they borrow and create about as much "money" as they want to at present. The still must play-act at having a "budget" for a while longer. It's all done for appearances now. The Congress does set borrowing limits, but the word "limit" has absolutely no meaning in the sense that it's always raised as the need arises. The government couldn't give up on the pretense of a budget; if they came right out and said to the world, "We're just gonna print as much as we want and foo on you," then all the borrowers of the world would know the game was up, the dollar would go down the toilet completely, and what? They'd start all over again with a "new dollar" that would wipe out the existing one. The new one would stink too; no overseas investors would touch it, but it would wipe out government debt and they could start all over again spending money. Think this couldn't happen? It's happened many times all over the world and it's called "devaluation of the currency." Argentina has done it many times. Repudiate the debt, wipe out the currency, start spending all over again.
Are Capsule Hotels coming to your neighborhood?
Not long ago, I posted a partially tongue-in-cheek comment about converting airliner seats to sleeping tubes and I used the "tube motels" in Japan as an example. Just a few days ago, there was a New York Times article about these, actually called "Capsule Hotels." They have these not only at the airports, but around other transportation centers in large Japanese cities. Originally, they were designed for travelling businessmen who might've missed their last train home and needed a convenient and inexpensive place to stay.
If you are old enough, you may remember in the late 1970's and most of the '80's, when we thought we were in danger of Japan buying out the entire USA. Well, they got into some financial trouble of their own and have been mostly in recession for some time. The capsule motels tell some of that story. Homeless people, who were unheard of in Japanese society in the 1970's and '80's, are some major customers for the capsule motels now. The capsules measure a bit over two yards by two yards and are not high enough to stand up in. The rent is about $30 a night but lately owners of these motels have granted reduced long-term rates to the homeless occupants.
People of influence in government and finance in the US had a chance to learn from the lessons of the "price asset bubble" in Japan that burst in 1989 but of course they didn't. At the peak in Japan, prime real estate in the Ginza district of Tokyo was selling for $93,000 per square foot and today some of this sells for one percent of its peak price. In fact, a good deal of the excess liquidity that was created in Japan and needed an investment outlet came to the US and was lent out as easy money, contributing greatly to our own bubble economy. We can hope that the long, lingering non-recovery of Japan's bubble economy will not be repeated here but at this time we can only wait and see.
If you are old enough, you may remember in the late 1970's and most of the '80's, when we thought we were in danger of Japan buying out the entire USA. Well, they got into some financial trouble of their own and have been mostly in recession for some time. The capsule motels tell some of that story. Homeless people, who were unheard of in Japanese society in the 1970's and '80's, are some major customers for the capsule motels now. The capsules measure a bit over two yards by two yards and are not high enough to stand up in. The rent is about $30 a night but lately owners of these motels have granted reduced long-term rates to the homeless occupants.
People of influence in government and finance in the US had a chance to learn from the lessons of the "price asset bubble" in Japan that burst in 1989 but of course they didn't. At the peak in Japan, prime real estate in the Ginza district of Tokyo was selling for $93,000 per square foot and today some of this sells for one percent of its peak price. In fact, a good deal of the excess liquidity that was created in Japan and needed an investment outlet came to the US and was lent out as easy money, contributing greatly to our own bubble economy. We can hope that the long, lingering non-recovery of Japan's bubble economy will not be repeated here but at this time we can only wait and see.
Why pickup trucks are what they are now
The problem with full-size pickups is that over the past couple of decades, they just started building them way too fancy and blown-out. None of the US makers offer a plain-Jane, no frills big pickup. The last time I looked at them at the Ford dealers they didn't even have one with a simple, two-door cab without the extended anything. Buyers are just as much to blame as the manufacturers; they started insisting on having every luxury and gee-gaw on their pickup as they had on their Cadillac. And what manufacturer is going to give up that profit treasure-trove? The styling on contemporary full-size pickups is all "huge" as if, let's see who can build the biggest truck and I'm not talking about the bed, but the cab. But then again, that's a buyer's preference, as look at all the SUV's. Look at the tire sizes. Yes, I know all about ground clearance, but when every soccer mom needs 20 inch tires to clear asphalt, that's the limit.
Yeah, the whole idea of owning pickups has kinda gotten turned on its head. Pickups at one time were "working vehicles" and only people who really needed one bothered to spend the money on it. Nowadays, lots of people buy trucks who don't need them; they just think, "I've gotta have a truck" (to haul that 5 gallon plant back from Home Depot once or twice each spring as an example). I hear the phrase, "I've gotta get me a work truck." Heck, all trucks are supposed to be for work but the buying public has often turned them into something else. The guy who wants to get a "work truck" might have a perfectly good two or three year old truck at home that he's driving already but it's too good for work, I guess. Lots of people around here who do have trucks leave them sit most of the time. Worse than that are the people who use an F-250 Diesel to drive a couple of miles down to the convenience store and back for a pack of Hostess cupcakes.
My cargo carrier is still my '72 Ford station wagon. It's a big fuel burner for sure, but that's about all it costs to run it. Add regular oil and filter changes as required on the 351C engine. No computer, just an inefficient carburetor that I can take off in five minutes and blow the dirt out of. Last year, an axle bearing got noisy and I had to replace that which wasn't too much strain. I've kept a nice Indestro axle puller from the old days. The bearing was made in China and cost $40; the last one I replaced on another car was $25 and made in USA. Off-shoring those parts makes good money for the middleman. Let's see, what else. Oh, the battery was old but still turning the engine over; it was nine years old so I bought a new one at the NAPA store. I don't like to wait until I've gotten my last crank out of one; who knows where that might take place. Once in a while I've gotta replace the ignition points and condensor, but that's about 20,000 miles worth. I let one set go over 40,000 miles once in my '66 Fairlane and when it started acting up, I pulled off the cap and found that the disc on one end was completely burned off. Still running, though. Let's see, door mechanism on driver's side started to not let me in from the driver's door (where else? It gets the most use), so took it apart, made an adjustment so it's good for another who knows how many miles. Nagging little stuff like that.
I can still remember most of the old pickups my dad owned over the years. Let's see, the first one I can remember was a fairly ratty '56 Ford F-100 with a tired 292 V-8 engine (complete with external oiling for the rocker shafts due to bad camshaft bearings). Then he had a '36 Ford flathead V-8 with the long gearshift that came out of the floor; I used to drive that one to high school some days. Next was another tired '56 Ford F-100 but this one had a '57 Lincoln Mark II engine and automagic transmichigan in it. That one was pretty fast, and after while he painted it but sold it shortly thereafter. Sometimes he would fix cars up real nice, then someone would make him a tempting offer he couldn't refuse. After that, he bought a '69 Ford Torino GT Ranchero, which had a 351W engine in it and was pretty fast but not much for hauling loads because after all, it was only a passenger car chassis. The last pickup he owned before he died was a 1979 Ford F-150, the slickside with no chrome on it and small, dog-dish style hub caps. Under the hood, it had a big, thirsty 460 V-8. He bought it new at a very distressed price that year when gasoline doubled in price (think Shah of Iran). He was going to haul a travel trailer with it, and he did some but got sick with cancer not long after and never used it to its full potential. After he died, the truck sat around with only 30K miles on it and various family members would borrow it from my mother every once in a while to move something. She finally got tired of paying the insurance and license tabs for it and sold it with under 35K miles on the clock. I would've liked to have bought it, but at the time I was deep into raising kids and I just didn't have the extra money to do so.
When my dad bought that '79 F-150 new, he took out what they call "loss of income" or some kind of disability insurance, I think it was. The deal was, if he became disabled during the time he was making payments, the insurance was supposed to kick in and pay off the truck. Well, that actually happened. He paid on the truck for about six months or so before he was diagnosed with cancer and could no longer work. So, he got the truck almost for free, but that's a very hard way to get a truck.
Yeah, the whole idea of owning pickups has kinda gotten turned on its head. Pickups at one time were "working vehicles" and only people who really needed one bothered to spend the money on it. Nowadays, lots of people buy trucks who don't need them; they just think, "I've gotta have a truck" (to haul that 5 gallon plant back from Home Depot once or twice each spring as an example). I hear the phrase, "I've gotta get me a work truck." Heck, all trucks are supposed to be for work but the buying public has often turned them into something else. The guy who wants to get a "work truck" might have a perfectly good two or three year old truck at home that he's driving already but it's too good for work, I guess. Lots of people around here who do have trucks leave them sit most of the time. Worse than that are the people who use an F-250 Diesel to drive a couple of miles down to the convenience store and back for a pack of Hostess cupcakes.
My cargo carrier is still my '72 Ford station wagon. It's a big fuel burner for sure, but that's about all it costs to run it. Add regular oil and filter changes as required on the 351C engine. No computer, just an inefficient carburetor that I can take off in five minutes and blow the dirt out of. Last year, an axle bearing got noisy and I had to replace that which wasn't too much strain. I've kept a nice Indestro axle puller from the old days. The bearing was made in China and cost $40; the last one I replaced on another car was $25 and made in USA. Off-shoring those parts makes good money for the middleman. Let's see, what else. Oh, the battery was old but still turning the engine over; it was nine years old so I bought a new one at the NAPA store. I don't like to wait until I've gotten my last crank out of one; who knows where that might take place. Once in a while I've gotta replace the ignition points and condensor, but that's about 20,000 miles worth. I let one set go over 40,000 miles once in my '66 Fairlane and when it started acting up, I pulled off the cap and found that the disc on one end was completely burned off. Still running, though. Let's see, door mechanism on driver's side started to not let me in from the driver's door (where else? It gets the most use), so took it apart, made an adjustment so it's good for another who knows how many miles. Nagging little stuff like that.
I can still remember most of the old pickups my dad owned over the years. Let's see, the first one I can remember was a fairly ratty '56 Ford F-100 with a tired 292 V-8 engine (complete with external oiling for the rocker shafts due to bad camshaft bearings). Then he had a '36 Ford flathead V-8 with the long gearshift that came out of the floor; I used to drive that one to high school some days. Next was another tired '56 Ford F-100 but this one had a '57 Lincoln Mark II engine and automagic transmichigan in it. That one was pretty fast, and after while he painted it but sold it shortly thereafter. Sometimes he would fix cars up real nice, then someone would make him a tempting offer he couldn't refuse. After that, he bought a '69 Ford Torino GT Ranchero, which had a 351W engine in it and was pretty fast but not much for hauling loads because after all, it was only a passenger car chassis. The last pickup he owned before he died was a 1979 Ford F-150, the slickside with no chrome on it and small, dog-dish style hub caps. Under the hood, it had a big, thirsty 460 V-8. He bought it new at a very distressed price that year when gasoline doubled in price (think Shah of Iran). He was going to haul a travel trailer with it, and he did some but got sick with cancer not long after and never used it to its full potential. After he died, the truck sat around with only 30K miles on it and various family members would borrow it from my mother every once in a while to move something. She finally got tired of paying the insurance and license tabs for it and sold it with under 35K miles on the clock. I would've liked to have bought it, but at the time I was deep into raising kids and I just didn't have the extra money to do so.
When my dad bought that '79 F-150 new, he took out what they call "loss of income" or some kind of disability insurance, I think it was. The deal was, if he became disabled during the time he was making payments, the insurance was supposed to kick in and pay off the truck. Well, that actually happened. He paid on the truck for about six months or so before he was diagnosed with cancer and could no longer work. So, he got the truck almost for free, but that's a very hard way to get a truck.
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