Archives For June 2012

I have had the same cell phone number for a long time. I have always escaped telemarketers calling my cell phone because I am very careful to keep the number private (I don’t put it on forms and such).

Recently, however, things have changed. I have been getting calls various numbers (one of them: (206) 496-0957). It’s my habit not to answer any calls from numbers I don’t recognize but I accidentally answered a call from this number one time. It was for some political survey. Unfortunately, by answering the call, I proved to them that my number was a working number.

The 206 area code is for the Seattle, Washington area.


From Thomas Sowell in his book Economic Facts and Fallacies: Second Edition*:

One widely quoted study, for example, used income tax data to show dramatically growing income inequality among “tax units,” leaving the impression that there was a similarly sharp increase in income inequality among human beings. Some tax units coincide with individuals, some coincide with married couples, and some coincide with neither, because some of these tax units are businesses. Comparisons among such heterogeneous categories are comparisons of apples and oranges. In some media translations of these studies, these tax units are often referred to loosely as “families.”36 But a couple living together and filing separate income tax returns are not two families, and to record their incomes as family incomes means artificially creating two statistical “families” averaging half the income of the real family.

Tax laws changed significantly during the period when this dramatic increase in statistical inequality occurred, so that some income that had previously been taxed as business income was now being taxed as personal income, particularly at the highest income levels, where business income is an especially large share of total income. In other words, money that would previously not have been counted as personal income among the higher-income tax units was now counted, creating the statistical impression that there was a dramatic change in real income among real people, when in fact there was a change in definitions used when compiling statistics. This study mentioned such crucial caveats in a footnote but that footnote was seldom, if ever, quoted in the many alarming media accounts.

Just as income statistics greatly under-estimate the economic resources available to people in the lower income brackets, steeply progressive income taxes substantially over-estimate the actual economic resources at the disposal of people in the upper income brackets. Most income statistics count income before taxes and leave out both cash transfers and in-kind transfers from the government. Since most of the taxes are paid by people earning above-average incomes and most of the income of people in the lowest income bracket comes from government transfers, income statistics exaggerate the differences in actual standards of living. Disparities between A and B will always be greater if you exaggerate what A has and understate what B has.

Makes sense but unfortunately, it doesn’t get a lot of attention from main stream media and our politicians won’t gain votes talking about the issue from this perspective.

*Affiliate Link

Busy Week This Week

June 14, 2012

This week is our church’s Vacation Bible School. This is my first year to help out. Anyway, I’m swamped in the mornings.

Lots of stuff going on this week. Front page article in Monday’s WSJ stating that JP Morgan knew of the their trading risks two years ago. Interesting.

Not related to personal finance but interesting anyway…

NY is contemplating on a wider food ban. Wow. Question: where does it end?

Donald Trump and his silly notion that Obama has a secret deal to lower oil prices in order to get elected. Be quiet, Donald. I have a feeling that the lower oil prices we are seeing are due to the somewhat negative economic outlook (look at what the stock market has/hasn’t done over the last month or so).

I hope to be back to regular blogging next week. Meanwhile, discuss amongst yourselves.

Most excellent:

A snippet from his address (bold mine):

…if everyone is special, then no one is. If everyone gets a trophy, trophies become meaningless. In our unspoken but not so subtle Darwinian competition with one another-which springs, I think, from our fear of our own insignificance, a subset of our dread of mortality – we have of late, we Americans, to our detriment, come to love accolades more than genuine achievement. We have come to see them as the point – and we’re happy to compromise standards, or ignore reality, if we suspect that’s the quickest way, or only way, to have something to put on the mantelpiece, something to pose with, crow about, something with which to leverage ourselves into a better spot on the social totem pole. No longer is it how you play the game, no longer is it even whether you win or lose, or learn or grow, or enjoy yourself doing it… Now it’s “So what does this get me?” As a consequence, we cheapen worthy endeavors, and building a Guatemalan medical clinic becomes more about the application to Bowdoin than the well-being of Guatemalans. It’s an epidemic – and in its way, not even dear old Wellesley High is immune… one of the best of the 37,000 nationwide, Wellesley High School… where good is no longer good enough, where a B is the new C, and the midlevel curriculum is called Advanced College Placement. And I hope you caught me when I said “one of the best.” I said “one of the best” so we can feel better about ourselves, so we can bask in a little easy distinction, however vague and unverifiable, and count ourselves among the elite, whoever they might be, and enjoy a perceived leg up on the perceived competition. But the phrase defies logic. By definition there can be only one best. You‘re it or you’re not.

You can read Mr. McCoullough’s commencement address here.

If everyone gets a trophy, trophies become meaningless. So true.

Honestly, kids need to learn that there are winners and losers in life. This is tough for a parent to allow their kids to learn, but it is necessary. It’s part of growing up.

Thanks for my friend, Todd, for finding this video.

I was looking at my Wells Fargo account last night and noticed they charged me a $15 (yes, FIFTEEN DOLLARS!) account maintenance fee. I remember getting an email or notice about the new fees but wasn’t concerned because it seemed as though we met their ridiculous criterea necessary to avoid the fee.

I was wrong.

I emailed Wells Fargo and asked them why I was charged a $15 fee. I woke up this morning to this response (or part of it, anyway):

Thank you for contacting Wells Fargo. My name is Felicia, and it is my
pleasure to assist you today.

I understand your concerns about the service fee that was recently
assessed to your account.

The $15.00 monthly fee is waived on the Complete Advantage Checking
account when three or more additional consumer accounts and/or services
from separate account categories are linked to this account, and at
least one of the following conditions is met:

– At least $5,000.00 in combined deposit and select credit balances
(includes credit card balances)
– A $75.00 or more single monthly automatic transfer to a Wells Fargo
Savings account
– A linked Wells Fargo Home Mortgage

To determine whether this balance has been maintained, we look at the
lowest balance in the account during the statement cycle. Accounts
eligible for the combined balance waiver are checking, savings, time
accounts, retirement accounts, and/or outstanding balances in a personal
loan or line of credit, home equity loan, or equity line.

They went on to say that our account had dropped “slightly” below the minimum and that was why we were charged the fee. She did go on to say that she would reimburse the fee this time.

So, here are my options:

1. Meet the bank’s criteria on a monthly basis and not pay the fee. This idea is laughable because of the amount of money the bank requires we keep in our account and the very silly interest they pay (I believe our last interest payment on this account was $.09 (NINE CENTS)). Of course, no one else is paying interest so this is a moot point.

2. Pay the fee ($180 a year).

3. Change banks (Ugh! I hate this idea (and don’t think for a second that banks don’t know this)). We have a credit card, a checking account for us, a checking account for each of our boys (both teens), and three savings accounts with Wells Fargo—not to mention all the payments that are tied to our account. Besides, there’s no guarantee that whatever bank I switched to wouldn’t change their policies in the future.

4. Send in my account information so Dick Durbin can reimburse me. As far as I’m concerned, this is Durbin’s fault. He’s the one who insisted on the law that caps the swipe fees that banks can charge merchants. You take away a revenue stream from banks and they’ll figure out another way to make back that revenue.

We have been with Wells Fargo for a long time. I have never been disappointed with them. But, this $15 fee may change all that.

This is pretty far off topic for AFM but I wanted to share it with you anyway. Check this out:

A while back, I purchased Brian Tracy’s “No Excuses” on my Kindle, which looks like this:

I had read it and saved it in my archives. One day I went to the archives and I noticed a book cover that I didn’t recognize. It was for another book titled “No Excuses,” which looks like this:

Very strange. Very troubling. Why?

Because I don’t like the idea of Amazon just being able to change the books in my library. Once I purchase a book, they have no right to change it. This really bugs me about e-books (in addition to their out-of-line pricing lately). Had I purchased the print edition of the book, this wouldn’t have happened. I just wish I didn’t like the convenience of e-books so much.

I emailed Amazon about the issue and they refunded me my purchase price but they had no explanation for what happened. The Brian Tracy book I purchased is still unavailable as a Kindle book.