Flip-flop

I recently saw a televised debate between the two presidential candidates, brokered by Pastor Rick Warren. He interviewed the two separately and asked them both the same questions. As a result of this “apples-to-apples” comparison I have changed my position, and am now, to my surprise, backing McCain over Obama; Here’s why…

• McCain was not afraid to give unpopular answers to tough questions. When asked “When does life begin?”, he answered “at conception” without hesitation. Obama’s “that’s above my pay grade” looked like dodging the question.
• McCain was candid about his failures. When asked about his greatest moral failure, he replied “The loss of my first marriage”. Obama’s reply was unmemorable.
• When asked about the most gut-wrenching decision that he ever had to make, McCain mentioned the time he had to eschew early release as a POW in Vietnam (because his father was an Admiral)
• When McCain said “I know how it feels to have it [liberty] taken from you” he had tears in his eyes; I don’t think he was acting.
• McCain made his position clear on controversial Issues, while Obama went to great lengths to avoid alienating anyone.

Don’t get me wrong, Obama was the better speaker; more engaging and far more persuasive. It’s just that I did not hear him take a definitive position on any issue, while McCain was unafraid to take an unpopular or politically incorrect one.

Obama often speaks about “Change”, but , like Kerry, seems incapable of articulating what that change will be.

Obama’s speeches are all about consensus and compromise, and those are good things – if you are one of a hundred Senators. The President has no such luxury.

With all of the bad things that are said about George W. Bush – and some of them may even be true – I, for one, am glad that he, and not John Kerry – was not in the White House on September 11th 2001

Of course, all this is academic; I don’t get a vote.

Now Reading: Journey, by James A. Mitchener

Discover… Freedom!

About four years ago I “Discovered” the Discover Gas Card, which loudly proclaims “5% cash back on all gas purchases!” Seemed like a good idea, so I started using it for all my gas purchases. I still shopped around for cheap gas as always, so it did not change my spending habits, but an extra $20 every two months or so, which I applied to the bill, was a useful perk; in the first year I got $100 of free gas.

Discover must have been watching out for people like me, as they changed the rules, limiting the 5% cash back to the first $1200 per year – making the total bonus $60 per year, after which the cashback goes down to 1% – effectively nothing.

I was annoyed, but not enough to walk away. I retaliated in my own small way; each new year I would use the card for gas until this limit had been reached, which happened after five or six months. Then I would quit using the card for the remainder of the year. I did this for a couple of years.

A few months ago I received a note from them informing me that they were moving my payment due date from the 6th of the month to the 29th of the previous month. When I asked them why they did this they gave me several non-answers and left me with the inescapable conclusion that the only real answer was “because we can“.

Again I retaliated in my own small way by paying the bills when they arrived, rather than “playing chicken” with due-dates.

Last month I noticed that the cashback rules had changed yet again. The yearly cashback limit was still $60 (5% of $1200), but now they were limiting it further to 5% of the first $100 per month – $5 per month. Since cashback can only be redeemed in $20 chunks this meant that I only got something back $20 every four months.

My first thought was “You have got to be kidding“. In a day where a single fill-up costs $50 to $150, they were only giving the full bonus on the first tankful!

This brings to mind a Darth Vader Quote in “The Empire Strikes Back: “I am altering the deal. Pray I don’t alter it any further“. I could not have put it better.

Of course Discover’s terms and conditions give them the license to play silly buggers with the terms of the agreement whenever they want to. By the same token I am entitled to walk away and never do business with them again.

I got my last $20 of cashback from them last week, and cancelled the card yesterday.

The moral of the story? Don’t play games with credit cards; it is a game of diminishing returns and quicksand-shifting conditions. With one hand  they offer gifts, and with the other they take them away. They are masters of the game – and they hold all the cards, if you pardon the pun.

To close,  I quote the WOPR (the supercomputer in the movie “Wargames”).

“Sometimes the only way to win is not to play”

Buh-bye then!

Recession? What recession?

We have had a seven-year-old spending a couple of weeks of her summer hols with us; this afternoon I left work early and we took her here for a few hours one Friday afternoon.

While there, I did a little people-watching. There were, of course, a lot of kids and young people racing around, high on sugar. There were people eating overpriced food that was not very good (we ate there and regretted it) There were a bunch of exhausted-looking parents looking for a place to sit and praying that their little treasure would stay on that bouncy castle for just a few minutes longer…

Money was spent; fun was had.

The one overriding impression that I got was that things are not quite as bad as the prophets of doom and gloom would have us believe.

You can’t turn on the TV without hearing some talking head telling us that “we are in a recession”. They need a new dictionary; a recession is defined as six consecutive months of negative growth; we have yet to experience one. Some say that the official GNP figures are suspect; they may be right, but it is also true that nobody pays any attention to talking heads that say “relax, things ain’t that bad” – it’s the doom-and-gloom mob who get the airtime.

Times are certainly hard. Businesses are cutting back and closing, and the cost in human misery is considerable; but I cannot help thinking that much of the problem can be attributed to human stupidity. Too many businesses are have been operating too close to the edge for too long, leveraged to the hilt with no reserves for hard times. Those businesses that operate debt-free (there are some, Walgreen’s is one) are doing just fine.

Another example is the so-called Mortgage crisis. That’s a misnomer – actually, it’s the sub-prime mortgage crisis (it affects very few people with conventional mortgages). It is caused, for the most part, by people buying more house than they can afford. Mortgage lenders lent money to people who did not know how to budget and often could not afford to buy a house. To compensate for the risk, they lenders used a higher (“sub-prime”) interest rate. When the borrowers could not keep up the payments, they lost the house, which was then repossessed. The Lenders then find themselves unexpectedly in the real-estate business in a buyers’ market, and then they are in trouble.

So who is to blame for this comedy of errors? It is easy to blame the Big Bad Banks for lending money to people who obviously could not afford the house that they were buying, but the buyers have to share some of the blame. And it must be remembered that the government forced – or at least strongly encouraged – the banks to provide Mortgages to the “underprivileged”. It may sound heartless, but in my book the “underprivileged” have no business buying a house until they earn themselves some privileges. Ignore the TV car salesmen – you deserve what you can afford and no more.

Yes, there are people who have lost their homes through death, illness or other tragedy, but that happens in good economic times as well as bad, and will not go away anytime soon. The rest of us – most of America, sadly – are living above our means and wallowing in debt. Financial pundits say that you should have three to six months of expenses put by for the proverbial rainy day. Do you? How about those you know?

I challenge you to find a family who saved and lived within their means and had three to six months of expenses saved, who lost their house because they could not keep up the payments. Go ahead; prove me wrong.

Look for the quiet ones; the plodders who live in modest houses, drive ordinary cars and don’t take lavish vacations. Those who look like they have got it all together – the snappy dressers with the nice cars – are probably playing games with debt to stay afloat.

The average family spends $300 per month (FITA*) on entertainment; eating out, movies, cable TV, games… They have money to spend on beer, cigarettes and lottery tickets. Sports fans routinely spend hundreds of dollars to see their team play.

And then they complain that it costs $100 to fill up their SUVs with gas.

Bah

Now Reading: Tough Choices: A Memoir, by Carly Fiorina

* FITA: Finger In The Air estimate.