GDP is not a monogram

Today, we learned that 3rd quarter GDP grew 4.3%. Or perhaps more accurately, TheStreet.com informs us that’s what the “Government Says.” Noting a source, or being skeptical? Nobody can blame them for the latter, since “The growth came despite two major hurricanes that slowed economic activity in the quarter, energy price shocks, higher interest rates and a record trade deficit in September, which subtracts from GDP.”

Many seem surprised by the fact that the “Economy Expands in 3Q Despite Hurricanes.” Nobody seems to have considered that the hurricanes may have boosted the economy.

How the heck does that work? A major metropolitan area is almost wiped from the map, three states are devastated, energy costs reach record highs, and I think that might have improved the economic numbers?

All those people who were displaced by Katrina and/or Rita still needed a place to live, and food. Many of them had to replace most of what they owned, and that meant spending money. Add the money that was spent by FEMA and the Red Cross and other aid organizations. Add everybody who spent money helping hurricane victims. The money being spent to clean and rebuild the gulf coast. All the insurance settlements being spent replacing that which was destroyed. The money being spent on security goons who might otherwise be overseas.

And finally, add any money that Joe and Jane Average spent trying to save on energy: a more efficient car; better insulation for the house.

Despite this better than expected showing for the economy, stocks and the dollar are in mixed trading — some things are up, some down. And gold is still trading at levels associated with “a safe haven when the dollar drops, inflation rises and economic calamity looms.”

Why aren’t the markets reflecting this great news? MarketWatch tells us it’s several things. Because there is still some inflation, the Fed will almost certainly raise interest rates. Happy New Year. Oh, and the consumer — whose spending resulted in the good news — cannot be counted on to spend even more money this quarter. After all, wages have risen less than 1% in the last 2 months and job growth is barely keeping up with new entries to the workforce. In fact, in the 3rd quarter, real disposable income fell The purchasing manager’s index is down. Government spending was up.

And finally, it seems that there are other areas of the world with much, much bigger rises in economic activity.

So when Larry Kudlow wonders why the Bush Administration is not shouting about how great the economy is, it might just be because it only looks great from a distance.

Nightmare on Shorties Street

A leading Democrat answers the question What did we know and when did we know it.

Kansas University thumbs its nose at the state Board of Education and offers a class called “Special Topics in Religion: Intelligent Design, Creationism and other Religious Mythologies.” I wonder if they will have a lecture on the Flying Spaghetti Monster.

Dude! It turns out that making pot busts a low priority in Seattle has not resulted in a drug fueled apocalypse of hedonism.

The Color Purple: Crushed between sagging public opinion of Republican tactics and a chairman of the Democratic party whose book suggests that DINOs (Democrats In Name Only) should consider themselves in danger of challengers in a future primary, Some “purple” Democrats are no longer voting for Republican bills.

Some travel tips for infrequent fliers, and an interesting item from Europe: the EU may stop going along with the United States’ data demands.

Finally, a few pre-Thanksgiving words on live Christmas tree safety. My only live Christmas tree safety tip is this: Don’t! Leave it growing somewhere outside! Seriously, imagine a door-to-door salesman showing up at your house saying “I am offering you the opportunity to pay me to put a messy, highly flammable allergen in your home for an entire month!” You might laugh before you threw him off your property. There are very nice fake trees to be had; Aluminum trees are no longer state of the art, but you can still get one if you love kitsch. And unlike live trees, you won’t have to buy a new one every year. If you just have to get a live tree, plant one in your yard and get outdoor lights.

I wish all of you a marvelous and bountiful Thanksgiving. May we all be mindful of what we have, and what others do not have.

No Way Jose

Today, the Department of Justice finally charged Jose Padilla with an actual crime. Granted, he is not charged with anything the government had previously said he did or was planning. These charges have nothing to do with dirty bombs and gas fittings in apartment buildings. Let me make one thing perfectly clear about this. If you think that Mr. Padilla is a bad, bad, no-good evil man, this is a good thing, because the evidence will show that and not only will he be convicted and put in prison for the rest of his life, but the doubters will be silenced. On the other hand, if you think that these charges are over-rated if not outright absurd, this is a good thing because the evidence or lack thereof will result in his acquittal and release, to say nothing of shutting up the folks who think that the government wouldn’t possibly hold a man for 3 years without charges unless he was truly evil.

Any way you slice it, this is long overdue.

Let me make a few predictions about the trial. First, the Attorney General’s office will fight like crazy to keep this all behind closed doors on the grounds of national security. His attorneys — whom he will hopefully be allowed to see regularly now — will argue that any sensitive information he could possibly have is 3 years stale, and besides that pesky Sixth Amendment says he has a right to a jury trial. No matter who wins that particular battle of motions, I seriously doubt there will be cameras involved in the courtroom. In fact, there may be gag orders and all kinds of things pending the final outcome. What evidence is released to the public will be convoluted.

If he does get a jury trial, the exact charges notwithstanding, you can bet that nobody on that jury will be a scientist or have any involvement whatsoever with property management.

There is a possibility that this is nothing more than a delaying tactic. You may recall that the Supreme Court has been asked to consider whether the government should either charge him or release him. This move means the Supremes most likely won’t hear the case at all. Oh, and the trial isn’t expected to begin until next September. That’s almost a year from now, and that assumes that all the legal maneuvering beforehand goes smoothly. His trial might not begin before the 2006 elections.

Remember, if the government can hold a man for 3 years on nothing more than “trust us, he is a very bad man,” they can hold you or me or a member of your family on that same basis. The framers of the Constitution and Bill of Rights knew this; let us never forget it.

A Few Things I’ve Learned About Investing

Somebody smarter than myself once said that anybody could learn from their mistakes, but a wise man could learn from somebody else’s mistakes. In that spirit, I present some humble tips gleaned from experience and observation. Remember, my definition of “investment” is “spending money with the reasonable expectation of receiving more money in return at a later date.” So life insurance and lotto tickets are specifically not investments in my book.

Be honest with yourself about what you expect your investments to do. Have two exit plans: one for if all goes as expected; one for if things don’t go as expected. Write your goal and plans down before spending money if you have to. There’s no such thing as a “sure thing,” so you need to be prepared for the idea that the hot stock of the day might be going down. Or maybe there isn’t as much market for collectable action figures as you thought there would be. It is alright to cut your losses rather than following a bad investment down the drain.

Investments are not cuddly. You may dearly love your collection of dolls or teacups or what-have-you. That does not make them investments.

The key to investing in assets is realizing that it’s a good deal before everybody else does. The Motley Fool used to talk about finding good quality small capitalization stocks before fund managers and the rest of Wall Street. When institutional interest finally comes, it should cause the price of the stock to go up. Of course, the opposite is true too. When you accidentally overhear multiple people in multiple places talking about a particular, a reversal is likely coming. Everyone who wants the action is already in.

The trend really is your friend. While it is a bad idea to go chasing the latest hottest trend unless you have nerves of steel and are poised to get out of your investments at a moment’s notice, it is a good idea to notice where things are headed. You may never be an expert reading stock charts, but it doesn’t take much to figure out that if prices keep going down, they are likely to continue. Somebody has to be the guy who buys at the very bottom, but chances are it’s not you. At least wait until prices stop going down. The only asset this advice does not apply to is bonds. That’s because as the price of bonds go down, the effective interest rate you earn on them goes up.

Never buy something without knowing what it is going to cost. Never ever place a market order for a stock that is not trading at the moment. If a fast-talking salesdude tells you to act now without telling you exactly how much money it is going to cost, don’t walk away: run! “I have to have it and I don’t care what it costs” is fine when ordering lobster at market rate, but it’s no way to buy a house or a stock or much of anything else that costs more than you are apt to have in your wallet in cash.

If you are going to invest in stocks, learn to use stop and limit orders. Stop orders — aka stop-loss orders — are designed to keep you from losing money. If a stock drops below the price you set, it sells. Or if a stock rises to a price you set, you can buy. Limit orders work the other way around: a limit buy order says you will pay no more than your set price; a limit sell order means a stock you own will be sold when the price rises to the set price. Each is valuable.

Finally, ask yourself why. Sometimes an investment serves more than one purpose. For example, if you buy a house it is both the place you live and an asset. If you put money in an IRA you hope to make money as well as get a tax break. When you invest money, you should be able to say why you think it’s a good investment to people like your spouse or financial advisor. Now and then, you should revisit this answer to see if it’s still true.

In closing, an interview with Yukio Hattori. House of Representatives defeats spending cut measure showing both that decency is a family value and that Republican House Leadership can no longer force obedience. Two good reasons why the GDP seems so much better from the top than from where we are. And three times as many people believe in ESP than believe Dick Cheney is a good Vice President.

Village of the Shorties

Molly Ivins says: “I have known George W. Bush since we were both in high school — we have dozens of mutual friends…. Spare me the tough talk…. Torture does not work. It is not productive. It does not yield important, timely information. That is in the movies. This is reality.”

The Mess That Greenspan Made points out that the CPI deliberately ignores the true cost of healthcare. I really need to add these folks to the Stuff I Read List.

The New York Times investigates a sociological trend: “They’re Soft and Cuddly, So Why Lash Them to the Front of a Truck?”

Maybe this will help the trade imbalance for a little bit: Japan buying Patriot Missiles until they can figure out how to build missiles themselves. I am concerned about the latest trends from Japan and the SDF.

National Geographic says it is now possible to turn poop into rocket fuel.

Alternet points out Look who we’ve made Ambassador to Italy!

And finally, a pro-life bill even a pro-choice person can love. Pro-life community, put your money where your mouth is.

Lovely Picture, but I Hate the Frame

There’s a lot of things going on in the world right now. A lot of people are talking about the Senate deciding that the Supreme Court has no jurisdiction over certain prisoners. Or President Bush, master of revisionist history, revising history by accusing others of revising history. Or the delayed House vote on the Federal budget — just like the last few years there’s no need to rush since the fiscal year started 6 weeks ago. Or the Democratic world rejoicing at what appears to have been a resounding victory over the Republican world in Tuesday’s elections. Or Pat Robertson’s continued silliness, this time calling down God’s Wrath over a school board election. There are already plenty of voices talking about that. I am uninspired to frost those particular cakes.

Instead, I would like to engage in some name-calling.

No, it isn’t what you think. George Lakoff is still thought of very highly in liberal circles. His fundamental idea, as you may recall, is that words — framing, or what we call things — matter. That’s fine, as far as it goes; political rhetoric is full of loaded terms like “tax relief” and “pro-choice” and “death tax.” Everyone who has been paying attention knows that these loaded terms are meant to make us think of things a certain way: “There’s a tax on dying? We’ve got to put an end to that!” Yet we have not stopped to consider the fundamental frames around our entire political spectrum.

“Conservative” brings to mind sober people in pressed blazers who worked hard to climb up the socio-economic ladder, who put aside 10% of their earnings for charity and another 10% for savings, and who are furthermore more or less content with the status quo. “Liberal” brings to mind long haired hippies and drug inspired music and whining about how we should take care of people and the various ways the world needs change while doing darned little about it.

“Right” versus “Left” is an even worse comparison. First of all, the overwhelming majority of people are very unsure what these labels mean. If you were to ask a dozen people whether they are “right” or “left” most of them would say “right,” but if you were to ask them their actual views, some of them would look a lot more centrist if not downright “left.” And who can blame them, everybody wants to be right. There’s the other problem. “Right” the direction cannot be distinguished from “right,” being correct. There is the unconscious feeling that “Left” must surely be “Wrong.” This idea has a long history of linguistic support: “gauche” is French for “left,” and who wants to be gauche?; “sinister” is Latin for “left” and certainly nobody wants to be known as sinister.

Can we please stop referring to the liberal end of the political spectrum as “left”?

Even the modern “Red” versus “Blue” distinction has problems. Why on earth are we using a system of classifying political thought on an coincidental color-coding on the 2000 Election electoral map? How on earth did these terms survive past Thanksgiving of 2000? Surprisingly, I think that Red/Blue labels are damaging to the Democrats. Consider this: would you rather be called a red-blooded American or a blue-blooded American? Hang a label like “Blue” on a patrician like John Kerry and watch him be ridiculed as an elitist snob. Red/Blue perpetuates the image of sushi eating latte drinking volvo driving coastal types ridiculing the hard working farmers and factory workers of the heartland, which the former refers to by the derogatory title “The Flyover States.”

We’ve got to take Red/Blue out back, shoot it, and put it out of our misery.

Every system we have of classifying current American political thought is subject to ridicule, but what should we put in its place? It is unfortunate that “Conservative” versus “Liberal” is the best thing we have, but if we must have an alternative naming convention, I think I have an idea.

Let’s take a page from the 70s. In several key respects, modern Conservatives are just as uptight as they were in the 70s, so I propose calling them after the famous Conservative TV Patriarch of the era, Archie Bunker. Archie was a man who believed in the New Testament, because it was the part of the Bible that was “still good.” He was a my-President-right-or-wrong support-our-troops kind of guy — if he was around today, you bet there would be a patriotic magnet on the back of his car. He was against his wife working, against his daughter wearing short skirts, against having the wrong sort of people in his neighborhood. He never met a stereotype he didn’t like. He was for hard work, lower taxes, and the Good Old U.S.A..

Oh, but if we use this metaphor, it is only fair to start referring to the Liberal end of the spectrum as the Meathead wing. Meathead — Michael Stivic — was Archie’s very liberal son-in-law. The contrast and conflict between the two was pretty much the thing that made the show work. He was the sort of guy who would wear a “make love not war” shirt under an army surplus jacket. He was a married college student, trying to get a good education and get a better job than his own father could ever have hoped for. He would have been for women’s rights even if his wife didn’t have to work to help him get through school. To be sure, there were holes in his View Of Everything, but nothing like those in Archie’s views.

Both terms are equally derogatory. Meathead States sneer at Archie Bunker States at risk of being called Meatheads. The Archie Bunker wing can mock the Meathead wing only by admitting that they are Archie Bunker.

In closing, “Gee, who could have known kids need sleep?” and a place I’ve got to check out!

Let’s Make Up Our Minds

Underneath the roar of “Scooter” Libby’s legal problems, Judge Alito’s unpopularity, several pockets of civil unrest, details of “a bad spy novel” turning out to be true, and the great bird flu panic, there is a quiet crisis bubbling throughout America.

It would be real easy to lose track of illegal immigration as a problem in this country. And no wonder: our policies are convoluted and downright contradictory.

Job growth is anemic, but employers claim they need low-cost H1-B and undocumented workers. GOP lawmakers in one state want to crack down on illegals while GOP voters in another state want to help illegals become citizens. We want a guest worker program and yet we want a fence across the Mexican border. We have The Secretary of Homeland Security saying we will get rid of every illegal while the courts point out this little thing called “due process” And finally, certain GOP lawmakers say that just because somebody was born here doesn’t mean they should be a citizen. Now, be careful with this one. They say it’s because they don’t want pregnant illegals deliberately giving birth here, but it sets a very dangerous precedent: the idea that citizenship can be taken away from Americans born in this country.

Of course, the vast majority of illegal immigrants are here because — however bad things may be here — it’s better than where they came from. This of course brings us to the fact that if we want to tackle illegal immigration, we have to work on improving conditions beyond our borders.

Employers tell us they need these undocumented workers. They tell us they can’t find Americans who are willing to work in terrible conditions for minimum wage or less. Imagine that! They tell us that — oh the horrors — prices might go up if they had to hire Americans to do the work. It makes me wonder what other laws they just can’t be bothered to follow.

I’m going to say this again, because apparently there are people who haven’t figured it out: we don’t know who illegal immigrants are. They might be just another person trying to escape crushing poverty or even persecution in their homeland. However, they might also be Bad Guys: smugglers, drug dealers, slavers, hit-men, and yes, terrorists. If illegal immigrants can get jobs in this country cleaning our buildings, processing our food, and sometimes even getting security clearances to work in sensitive places like military bases, then so can terrorists.

Illegal immigration is bad for American workers, bad for governmental budgets, bad for security. It’s even bad for immigrants, who often have little or no legal recourse should Bad Things happen.

In closing, a must-read article from Bruce Schneier on how the State Department wants to make Americans less safe overseas, Wal-Mart discovers the hard way what statisticians have known for years, poor people — their potential employee pool — are generally sicker than middle class people, Get Rid Of Your Junk! and even the Vatican thinks people should listen to science over “fundamentalism” so what’s Kansas’s problem?