Archives For May 2011

The Fins website published a list of seven questions to look out for in a job interview along with what NOT to say to each question.

The questions/topics that could be pitfalls to a successful interview:

Tell me about yourself. For some reason the first part of this commercial popped into my head:

Why do you want to leave your current job? Say the wrong thing and you’re in big trouble.

What are your biggest strengths and weaknesses? I always hated this question.

How would your current or former colleagues describe you?

What is your goal for the short term?

Are there certain tasks or types of people you don’t like? I have never been asked this question but I could see how it would trip people up.

Do you have any questions? From the article…

No-nos include asking about compensation for the job, what the company does, if you can work from home, how much vacation time you’ll get, or if the drug and background testing are really mandatory.

Who in their right mind would ask any of those questions (the questions directly above)?

Sorry it’s taken me so long to get this out. Below is the chapter list and sign-up sheet for the community review of Thomas Sowell’s Basic Economics 4th Ed: A Common Sense Guide to the Economy*. You can click on the graphic to download a PDF version. If you’re interested in a posting a review on your website, simply select a chapter (you can do up to two chapters), and send me an email (JLP – at – and I’ll add you to the list. All spots will be filled on a first-come basis. AFM readers who don’t have a blog, can review a chapter too. I’ll simply post their review here on AFM (send me an email and we’ll work out the logistics).

Here is the list:

I’m really looking forward to this review. I think it will be a lot of fun.

*Affiliate Link

Yesterday’s WSJ had a little article about gasoline futures. They explained that gasoline wholesale prices were back below $3/gallon due to easing concerns of flooding along the Mississippi River.

One thing I learned from the article is that retail gasoline prices are typically about $.70 higher than the wholesale level. They quoted the price for reformulated gasoline blendstock (RBOB) at around $2.93, which would put retail prices at around $3.63 a gallon. I paid $3.749 this morning.

Regardless, I have a feeling that any price drop is temporary.

One thing in the article that I think is a misprint is this (bold mine):

Worries that the floods would disrupt gasoline production pushed the RBOB contract as high as $3.39 a gallon last week. That sent gasoline’s premium to crude oil soaring to an all-time high above $40 a gallon.

The premium, called the “gasoline crack,” has since plunged to below $26 a gallon. That means smaller profits for refiners.

I’m not sure, but I think those should read “$40 a barrel” and “$26 a barrel.”

BG, left this comment on my post from yesterday:

“It is weird that unemployment dropped after the market crash until the Smoot Hawley act passed and then it sailed into the double digits. ”

That is a statistic that I can’t believe. If that were the case, then why was Smoot-Hawley even passed? It doesn’t add up.

The great depression got worse, not because of this act, but because of the massive banking runs, and all out mistrust in wall-street (sound familiar). There was no FDIC to protect investors, etc, so people just sat on cash. Also, the multi-year long deflation made it even more appealing to NOT buy stuff, and just sit on cash: which is what everyone did who had cash.

I might speculate that the Smoot-Hawley Act was passed in an effort to “do something.”

Here is Thomas Sowell from chapter five of his book, The Housing Boom and Bust: Revised Edition*:

Two months after the stock market crash in October 1929, unemployment rose and peaked at 9 percent, after which it began a generally downward movement over the next several months and subsided to a level of 6.3 percent by June 1930. Although these levels of unemployment were higher than those before the stock market crash, and were a legitimate cause for concern, they were not even half of the unemployment rate that would begin, and persist for years, after major federal interventions in the economy.

The first of these major interventions began in June 1930, when Congress passed the Smoot-Hawley tariffs, the highest in more than a century, in an effort to reduce imports and thus preserve American jobs by having the formerly imported goods produced in the United States instead. A public appeal signed by a thousand economists from leading universities warned against the consequences of the Smoot-Hawley tariffs, but these warnings were ignored, just as the many warnings about the risky housing markets were ignored in our times. As already noted, unemployment stood at 6.3 percent at this time. In November of 1930—five months after the Smoot-Hawley tariffs—unemployment reached double digits for the first time in the decade, at 11.6 percent.

In other words, unemployment had not yet reached double digits until more than a year after the stock market crash. In the meantime, there were the Smoot-Hawley tariffs and unemployment rose to double digits just five months after those tariffs that were supposed to reduce unemployment. Moreover, while the initial rise in unemployment after the stock market crash began to subside after peaking two months later, the double digit unemployment that began after the Smoot-Hawley tariffs continued for every month throughout the entire remainder of the decade of the 1930s.

Not all of this was due to the Smoot-Hawley tariffs alone. These tariffs, passed during the Hoover administration, were only the first in a series of major federal interventions in the market that continued under FDR throughout the remainder of the decade. The biggest of the New Deal interventions was the National Industrial Recovery Act of 1933, which controlled prices and wages in industry. The Agricultural Adjustment Act of 1933 established federal control over prices and output in agriculture. The National Labor Relations Act of 1935 made it mandatory for employers to negotiate wages and working conditions with labor unions. FDR also took the country off the gold standard and issued thousands of executive orders—more than all the subsequent Presidents of the United States in the twentieth century combined.

The New Deal administration not only set up policies to deal with existing economic problems of the 1930s, it set up enduring institutions to change the way the American economy operated. Thus we are, in the twenty-first century, paying agricultural subsidies to millionaires and billionaires because of a program created during the Great Depression to help small farmers who were having a hard time. Again, once you have opened the floodgates you cannot tell the water where to go. Programs set up to help one constituency deal with a current problem acquire new constituencies and take new directions. Even if the original problem gets solved, that does not mean that the program will end, or even that it will not continue to expand.

Of course, not everyone agrees with Thomas Sowell. For instance, I did a google search looking for monthly unemployment numbers for 1929 and 1930. I didn’t find what I was looking for but I did find this piece by Paul Krugman stating that it was getting away from the New Deal that helped prolong the Depression. Of course, Mr. Krugman doesn’t mention the other acts that Sowell did in his book. That’s what makes talking about this stuff so frustrating.

*Affiliate Link

During my run this morning, “The Trees” by Rush was played randomly by my iPod. I thought the lyrics were interesting:

There is unrest in the forest
There is trouble with the trees
For the maples want more sunlight
And the oaks ignore their pleas

The trouble with the maples
(And they’re quite convinced they’re right)
They say the oaks are just too lofty
And they grab up all the light
But the oaks can’t help their feelings
If they like the way they’re made
And they wonder why the maples
Can’t be happy in their shade

There is trouble in the forest
And the creatures all have fled
As the maples scream ‘Oppression!’
And the oaks just shake their heads

So the maples formed a union
And demanded equal rights
‘The oaks are just too greedy
We will make them give us light’
Now there’s no more oak oppression
For they passed a noble law
And the trees are all kept equal
By hatchet, axe and saw

They have a very “Ayn Rand” message to them.

This interview is a couple of years old but it’s still interesting to listen to.

“In politics, what matter is not what the facts are. What matters is what people believe. Because people vote on the the basis of what they believe and not on the basis of what the facts are.”

Fast forward to about 1:15 when he talks about the Great Depression and the New Deal. Very interesting…

I stopped by Starbucks yesterday afternoon with my wife, daughter, and my mom. While waiting for our drinks, I looked at the front page of the Sunday edition of the New York Times. On the front page was an article titled, With Credit Bureaus, It Pays to be on V.I.P. List. Here are the opening paragraphs:

The credit rating bureaus, whose reports influence everything from credit cards to mortgages to job offers, have a two-tiered system for resolving errors — one for the rich, the well-connected, the well-known and the powerful, and the other for everyone else.

The three major agencies, Equifax, Experian and TransUnion, keep a V.I.P. list of sorts, according to consumer lawyers and legal documents, consisting of celebrities, politicians, judges and other influential people. Those on the list—and they may not even realize they are on it—get special help from workers in the United States in fixing mistakes on their credit reports. Any errors are usually corrected immediately, one lawyer said.

For everyone else, disputes are herded into a largely automated system. Their complaints are often electronically ferried to a subcontractor overseas, where a worker spends, on average, about two minutes figuring out the gist of the matter, boiling it down to a one-to-three-digit computer code that signifies the problem — “account not his/hers,” for example — and sending a dispute form to the creditor to investigate. Many times, consumer advocates say, the investigation translates to a perfunctory check of its records.

Why is this front page news?

Wouldn’t the rich, well-connected have lawyers and such to handle such matters? Is it any surprise that such errors would be taken care of quickly?

The bottom line is you have to be on your toes. You have to keep on eye on your credit report. The article mentions some lady who was denied a job because of a credit report error. It might be a good job to check your credit report before you start looking for a job.