Plunging Towards Gomorrah
Archive for March, 2009
florida home sales
Mar 29th
Carpe Diem has done a wonderful job showing home sales trends. Home sales are up in California, Florida, and Arizona, but the median price has fallen. This is most evident in the state of California. Here is the data for Florida.
This is the market at work. The government isn’t causing this to happen. Home prices were inflated above the market price. Now that the price has fallen the market is taking care of itself. He also has an eye opening graphic that displays supply and demand in action.
Buyers Remorse: The Economist
Mar 29th
The Economist is trying to come to terms with their endorsement of Barack Obama last year. As I’ve written before the fact that the administration is woefully adrift and apparently unprepared should not be shocking. The president wasn’t qualified for the position. He has never served as an executive and has never run anything successfully his entire life. Obama’s struggles the first two months should be expected, and he has plenty of time to grow into the position. Fortunately for Obama the United States isn’t Kentucky basketball. Four years is an eternity in politics. The Economist takes Obama to task on several different fronts, but I think this is the most important area of concern.
If Mr Obama cannot work with the Republicans, he needs to be certain that he controls his own party. Unfortunately, he seems unable to. Put bluntly, the Democrats are messing him around. They are pushing pro-trade-union legislation (notably a measure to get rid of secret ballots) even though he doesn’t want them to do so; they have been roughing up the bankers even though it makes his task of fixing the economy much harder; they have stuffed his stimulus package and his appropriations bill with pork, even though this damages him and his party in the eyes of the electorate. Worst of all, he is letting them get away with it.
The president needs to rein in the leadership of the Congress. Pelosi and Reid are way outside the American mainstream. Obama will appoint leftist anti-property rights judges and the left will be happy. The right to have an abortion and for homosexuals to get married is far more important to liberals that the constitutional property rights and they can’t get these “rights” through the legislature. “Progressives” view the constitution as a living document created by racist white men who not only owned slaves (Tom Harkin), but also believed in God.
There’s nothing like a good abortion protest to bring out the God haters.
The picture above is appropriate. “Progressives” also don’t like to take the constitution literally either. For those scoring at home Bob Avakian is an Atheist and a Communist (i.e. he has a perfect pro-choice record). In order for Obama to successfully serve the “progressives” and the rest of the country he’ll have to stand up to his party in Cogress and throw bones to his base on appointments. Does this sound familiar (See: Bush, See: Clinton)?
southpark: bail outs
Mar 26th
Southpark explains how the bail out process works. So far this is the best explanation I’ve seen.
advertising genius: 2006
Mar 25th
Every year during March Madness there’s one commercial that is played relentlessly on CBS. This piece will always hold a special place in my heart. There’s so much to say about this ad, but it speaks for itself.
Darius Rucker will always be a legend to me after this contribution to society.
true outrage
Mar 25th
The past two months have been terrible for entrepreneurs. Not only is the economy bad (Tom Harkin), but it seems the press, president, and Congress are at war with successful Americans. Listening to the president’s faux outrage was bad, but the tax bill passed in the House was outrageous. The government has been wasting trillions of dollars for decades and we’re supposed to be upset by a few hundred million? The New York Times posted a letter of resignation from one of the people who received a bonus from AIG.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
If only our elected representatives worked so hard for so little. Here’s the outrage. The budget the president has submitted. Why hasn’t the press addressed it with the same outrage? The president blames our problems on fiscal debt he’s inherited and his remedy is even more debt. When Obama is pressed on his plan this he claims there are only two options a) spend more or b) to do nothing. He’s a liar. Obama’s plan doesn’t even factor in the Social Security and Medicare shortfalls. The budget the president submitted might as well be using monopoly money.
There are plenty of alternative plans floating around that are at least worth considering. Despite the partisan rhetoric coming out of the White House the republicans presented a plan to him in his office and he acted like he never saw it. No one is suggesting the president should do nothing. There also no shortage of ideas coming from economists all over the United States. It’s seems it’s either Obama’s way or no way. This is what change looks like America. Bad fiscal policy has been replaced with worse fiscal policy.
obama attacks charitable giving
Mar 25th
Well, it looks like president Obama finally read Arthur Brooks’ book Who Really Cares. Obama realizes that limited tax donations will not really effect his voting base. Conservatives are the ones who donate more money and time. I’m not exactly sure what the White House is thinking on this one. Add this to the blind stupidity file along with the Capital Gains. There’s no reason to do this other than partisan gain. It’s not going to mean more tax revenue. What’s the point in going to war with charitable organizations? What does the president hope to gain?
President Obama’s proposal to limit the tax deductibility of charitable contributions would effectively transfer more than $7 billion a year from the nation’s charitable institutions to the federal government. But the high-income taxpayers affected by the rule change are likely to cut their charitable giving by as much as the increase in their tax bills, which would, ironically, leave their remaining income and personal consumption unchanged.
Every time something like this comes up I grow more and more convinced that the president is completely clueless. The only thing he has going for him is reading speeches on the campaign trail. Everything else so far has been a mess.
circuit city: echo chamber distortion
Mar 23rd
In January Circuit City went bankrupt. The once proud retailer is a prime example of what happens when a company is managed poorly. During the Summer of 2002 I left Home Depot to pursue a job at Circuit City. After over a year at the Home Depot I liked the fact that Circuit City offered a commission sales structure and that was a far more attractive option at the time. Plus, the location of the store was close to where I went to school.
At Home Depot one of my favorite customers was a gentleman who was from Australia. He was a former rugby player and I aways had a great time talking to him. When I told him I was going to Circuit City he told me that he’d see me around, but never at Circuit City. When I asked him why he said it was because their commercials made men look like idiots. I never saw this gentlemen again.
In hindsight, maybe he was right. The first six months at Circuit City were challenging. My co-workers were mostly seasoned commissioned sales employees. All the sales employees were encouraged to sell warranties which wasn’t a big problem. There was a financial incentive to sell the warranties since we were being paid commission. I worked in the computer sales section; however, I was allowed to sale in other departments if I wished. Everything changed when Circuit City ended their commissioned sales structure. I survived the round of layoffs mainly because I hadn’t been there long enough. For the next year and a half I would never receive another pay raise. The reward for being most knowledgeable person in my department was that I got to do inventory every week. In many ways the writing was on the wall for Circuit City.
After the change in pay structure Circuit City became Best Buy Lite. The stores weren’t as appealing as the Best Buy stores and the employee morale was dismal. The managers at the store were under immense stress from corporate. Corporate management created an atmosphere of fear and intimidation for everyone who didn’t hold the company line. There was no tolerance for not selling warranties. Since I worked in the computer department this was annoying. There is no sales margin in computer sales so the only way Circuit City made money was on accessories and warranties. Selling a $150 warranty on a $450 e-Machine isn’t exactly an easy sell and it’s also a bad idea for the customer. That $5 USB cable you can buy online would only cost you $25 at Circuit City. With so much information available on the internet Circuit City didn’t have a clue what it was doing.
After a year of constant change my attitude had changed and I wasn’t the pleasant sales person I was when I started. It was a miserable place to work and I was completely stressed out. My store manager Virgil (who wasn’t exactly the sharpest tool in the shed) had me written up on one occasion because he said I didn’t “offer a warranty on a laptop sale.” The truth was he just didn’t like me. I had worked with the woman before and had already talked to her about the warranty. This is the kind of nonsense that was going on every day. For Virgil, besides having gizmovision that allowed him to see across the store in crystal clear HD he could also hear conversations 100 feet away. I still don’t understand why he was floundering around as a Circuit City manager when he had superpowers. I digress. It wasn’t Virgil’s fault. He had worked at the company for his entire life. He didn’t have a college education so the company was his clearest path to advancement. Virgil either did what management said or he’d get canned. In fact, the previous manager had been fired. I should mention that the location for my store was terrible and that caused a lot of headaches for everyone.
Eventually I moved on to greener pastures. A lot of the employees were going to college and it was a temporary stop on life’s road. I always felt bad for everyone else who had to stay. Circuit City was going south and the corporate management didn’t have an answer.
Meanwhile, not far up the road, Best Buy was selling largely the same products but in a way that was actually fun. Today, those two retailers can be taken as mirror images of one another — two approaches to the same challenge, one successful, one disastrous.
“Circuit City did not have a distinct brand position — they didn’t stand for anything in particular,” said Mark Michelson, who conducted the consumer research that was used to design the last round of Circuit City stores. “Best Buy is known for low price and good service; their employees are also among some of the most satisfied at any retailer. Wal-Mart became a stronger player in electronics, with dominance of the low price position. Amazon.com and other e-tailers offered convenience with low prices. Circuit City simply did not have a position, except a bad reputation for poor service and mistreating employees.”
The internet age was not kind to Circuit City. Shoppers were now more educated about products and were more concerned with price and availability. Best Buy’s stores were larger, more open, and their sales staff wouldn’t bombard you as you walked in the door.
I should also mention my immediate manager. Bobbie was her name and she was great. I believe she is retired now, but she was a tough woman who didn’t have tolerance for mediocrity. We butted heads on a few occasions but she was fair and I had a ton of respect for her. The people I worked with were great and I have a lot of great memories despite the fact the company was headed south. I still have friends who I worked with during that time and most of us are happy we don’t work at Circuit City anymore.
