Cents and Sensibility

by Pa Rock
Capitalist Swine

I had lunch at the Subway on base today. My bill was $4.99 and I handed the young man at the register a ten dollar bill. He handed me back a five dollar bill and then asked something that left me dumbfounded. He asked if I wanted my penny. I looked him squarely in the eyes and said that of course I wanted my penny. (I support some charities, but Subway is not on the list!) He laughed (laughed!) and then handed me the penny.

I am not a great financial planner, which explains the modest circumstances of my life. But I do know the value of a penny. I scan the ground as I walk, constantly on the lookout for an unusual rock, an interesting bug, and the odd bit of change. Just today I came up with a Canadian dime. A Canadian dime is the equivalent (at least) of ten U.S. pennies.

A penny saved is a penny earned – as an ancient cousin of mine used to say. The more pennies one saves, the more he has earned. Today I found ten pennies (that dime from Canada) and kept Subway from taking a penny that rightfully belonged to me. That is a total of eleven pennies, and the day isn’t over. Just four more pennies and I would be able to buy a share of the world’s largest satellite radio provider – Sirius XM! That’s right…fifteen pennies would make me a member of the investor class - and that little jerk at Subway wanted to keep me from moving up the economic ladder!

A couple of weeks from now, if I am very observant and marginally lucky, I might come up with a hundred and five pennies when (at today’s closing price, at least) I could purchase a share of Citigroup. With one hundred and sixty-eight pennies I could buy a share of the world’s largest car company – General Motors. Or, if I decided to wait a day or two beyond that, I might come up with an additional six pennies and be able to buy a share of Ford Motor Company. The opportunities are endless!

Do I want my penny? You bet your wage-slave ass I do!

Notes on a Bad Economy

by Pa Rock
Citizen Journalist

There are different ways of judging the health (or lack thereof) of the economy. My father, who is invested in real estate and the stock market, tends to see the Dow Jones as the basic barometer of our nation's health. Coming at it from a social work perspective, I give more credence to tangibles like housing foreclosures and joblessness. The past two years have seen all of these indicators head toward the toilet, so my dad and I can both agree that things are bad regardless of our unique perspectives.

Today was a terrible day for the American economy. All day long news kept coming of big layoffs. Caterpillar is doing away with 20,000 jobs, Sprint Nextel is losing 8,000, and Pfizer Pharmaceutical is buying up Wyeth Pharmaceutical (funded partially by banks that received bailout money), and the new organization will cut over 8,000 jobs. (The bailout is helping to fund an 8,000 job loss!) Home Depot is cutting 7,000 people from their payroll, and General Motors announced that they are trimming 2,000 more employees. One estimate that I saw late in the day said that 68,000 layoffs had been announced today alone, and the total for January, which is not over yet, is in excess of 200,000!

But get this - the nation's three basic market measures - the Dow, the S&P, and the NASDAQ - all went up today, albeit modestly. Apparently cutting jobs is a good thing to stock traders - just as long as it isn't their jobs that are being cut - or those of their spouses, children, or parents! It's all relative.

What does the loss of 200,000 jobs matter in the overall scheme of things? It means that mortgage payments won't get paid, new cars won't be purchased, schooling will be put off, vacations will be scaled back or not taken, and medical treatment will be postponed or completely ignored. It means the economy will keep shrinking, fewer goods will be purchased, fewer services required, and more layoffs will be implemented. It also means that crime will necessarily increase.

The government has already kicked in a huge wad of cash to try and end the vicious downward economic spiral, but at last reading the banks and financial institutions that received our tax money were focused on not telling us how it was being spent. So far it appears that most of the money is being hoarded and not pumped back into the economy as originally intended.

That may, however, be changing. Some of the bailout loot was apparently loaned to Pfizer today so that they could eat up Wyeth - and cut a butt load of jobs! It was also announced today that Citigroup, which received $43 billion in government money, will soon take possession of a new $50 million corporate jet - a very sleek affair that seats twelve people comfortably!

Perhaps the time has come to nationalize the bastards!

My Next Car

by Pa Rock
Citizen Journalist

There's a new car making a debut on the world's roads. It's a snazzy little roadster that goes from zero to sixty in four seconds and can run at a hundred-and-twenty miles per hour. The cost of operating this little gem is an amazing two-cents per mile.

The roadster is made by a new company called Tesla. It operates off of an electric battery and uses absolutely no gasoline or oil. The current battery has a range of 200 miles before having to be recharged. The cost is still prohibitive to most of us - in excess of $100,000 - but the limited number currently being manufactured have people lined up waiting to purchase. The company is preparing to roll out a sedan model at approximately half the price of the roadster.

So, if all of that is true (and it is), why are the Big Three American automakers still dragging their feet on going ahead with their own versions of the Tesla? Is it that they are comfortable doing things the old way and not eager to make drastic changes to the way they do business? Yes. Is it that they think they know what America wants in spite of massive data to the contrary? Yes. Is it that they have grown complacent and are organizationally resistant to change? Yes, of course it is.

America watched in horror this week as the CEOs of the Big Three flew from Detroit to Washington, DC, in their three individual corporate jets so that they could beg money off of Congress with vague promises to change the way they do business - but without any definitive plans on how that was to be accomplished. We're here and you need to give us money, or we'll go out of business and take our nation's economy down the drain with us. Corporate blackmail. We're too dumb to follow the basic tenants of capitalism and give the country what it wants - so give us some public money to reward our incompetence.

Yeah, right!

Those Tesla's are expensive. But I remember when pocket calculators first came out - they sold for two or three hundred dollars each. My first computer set-up was nearly five thousand dollars. My first digital camera was over two thousand. My first laptop computer was used, weighed a ton, and cost me a little over two grand. The point is that things always start out expensive, but if they fill a public need, they get better and cheaper quickly. Tesla cars will be priced so that everyone can afford one in just a few short years.

If our government is going to hand out money to the auto industry, why does it need to be to the dinosaurs like Ford, Chrysler, and General Motors. Their high-flying executives have spent years making bad decisions, and now they should have to pay the ultimate price. Let them go bankrupt, and give the cash to the innovators. Maybe Tesla could take over the GM factories and hire their laid-off workers to make the cars of the future. With some big government backing it could happen relatively soon, and we could all be driving around in pollution-free vehicles for two-cents a mile. What's wrong with that idea?

(And maybe the Saudis could switch from an oil economy to bagging sand and selling it to Lowe's and Home Depot!)

I drive an old car, a 1999 Chevy Cavalier rag top. I am going to keep driving my old car for the foreseeable future. If the transmission goes out, I will have it replaced. If the engine goes out, I will replace that also. Both of those purchases will be cheaper and smarter than making payments on some American monstrosity that will be completely out-of-date and out-of-fashion before I could get it paid off.

Someday I will buy a new car. I hope that it will be an American product made by unionized American workers. But regardless of where it comes from or who makes it, my next car will be a Tesla or something very much like a Tesla.

I'm ready to drive into the future!