211: Help for the new poor

LA Times article as the scoop for those who are newly poor (thanks to commentator fried at CR): "A guide for the newly poor: A major financial or personal blow can make obtaining just the necessities of life a challenge. Here's how to cope." I don't recall seeing such article in the downturn of the '01/02.

I was living in Austin back then and things were bleak but not this bleak since it was only the dotcom and related hitech businesses -- things were tough but not impossible to find jobs. All the coworkers I knew from a company which went bust in '02, they all found jobs that year (not all in Austin but still). This time around, it's not just the hitech and financials which are suffering. Real estate in Austin went down such that we had "naked" buildings (steel frames rusting away for years) and cities where talking about raising tax rates to make up for lower appraisals. In fact, when we sold our home in 2005 (bought in 2002), we did lose a good chunk of money (right at the peak of the California & Florida real estate bubble peak). Austin didn't get the bubble until last year but that bubble was rather small compared to what happened here in Orange County.

Anyway, we're just getting started with GD2, so hang on tight: you ain't see nothing yet....

Copyright 2008, DannyHSDad, All Rights Reserved.

"Progressive" South: Asians in politics

I read "Louisiana delivers GOP 2 seats in Congress" out of vague curiosity, but was surprise to read about first Vietnamese-American elected to Congress as a Republican.

Congrats to Anh "Joseph" Cao! Louisiana has claims to not only the first Indian-American governor but Asian-American Congressman, too. What is the South turning into? I would have thought Democratic Californians would put Indian-American as governor or Vietnamese-American as congressman. So much for the "progressive" Californians...

Copyright 2008, DannyHSDad, All Rights Reserved.

Jobs for GD2

It seems that president-elect Obama wants to pump up the economy with keep busy jobs (like changing light bulbs).

As a libertarian, I say that less is more and government should stay out of the economy (other than cutting spending and taxes: less intervention is better).

However, some commentator at CR pointed out the too many have negatives and contribute no positive way out of this economic downturn. Well, here are some of my thoughts:

1) Allow people to farm at home. There are people who do quite well on a regular plot of land (e.g., Dervaes family farms about 3 tons (6,000 pounds) of food on 1/10 acre of "farm land" in Pasadena, CA not too far from downtown L.A.). This means getting rid of dumb laws like you must have green lawn in your front yard. For those who don't own a land with dirt (renters and condo owners), why not open up unused land like city parks and allow people to farm there? Also encourage the youths to help their neighbors who are elderly or disabled.

2) Harvest rain water. By collecting rain, you can save lots of money. And helps the environment too (need to take less water from the source, like what we do in California: piping it from North to South).

3) Free energy regulations so that small generators can grow (be it natural gas based or mini windmill or solar or geothermal or whatnot). Too much regulation hampers innovation (most safety regulations are a joke: why do so many people die even after FDA approval of drugs?) and prevents small inventors from creating and selling products to local home owners (or even renters). (I bet there are tons regarding electrical generators as well as how the power can be used/transmitted -- I mean if one person wants to "sell" to his neighbors, I bet he would be shut down by electric regulators.)

4) Free communications (i.e., deregulate FCC). Allow people to create neighborhood wireless internet system. Why should big companies get monopolies?

5) Deregulate vehicle rules. Too much rules make it hard for inventors to innovate new propulsion technology for cars (or other alternative vehicles). I can't believe that even biodeisels are taxed/regulated (I heard of a case where one can't process used oil and pour into your diesel engine without paying taxes).

Just as we had a lot of technological process without government interference, a lot of innovation can happen as soon as government gets out of the way. Now that Great Depression 2 is upon us, we should allow small guys have more freedom to explore and allow them to innovate out of this economic downturn. What we don't need are more bridge to nowhere and other boondongle projects.

Copyright 2008, DannyHSDad, All Rights Reserved.

Rent vs Buy

Here's our calculation: Rent is currently at $2150/month (that $50/month is for our dog). We could probably get $1750/month if we sign up for a lease.

The home we're buying is $320,000. The downpayment of 20% equals $64,000. Plus closing cost of about 3% which would total $73,600. Which, if we were earning 3.77% interest (5 yr CD according to bankrate), it would generate $231 per month.

So, renting is about $1,519/month.

With 256K mortgage at 5.62% the payments would be about $1473 per month. Taxes $290, insurance $60. Total of $1823. With about $350/month of tax savings the first few years.

That's $1,473/month. About $46 per month cheaper.

However, things aren't so simple since there is the issue of maintenance (adds to the monthly cost) and expected inflation (lowers the worth of savings and increases the worth of a home) and price change of the home itself (which, if in the normal economy, things will rise with inflation). Unfortunately, we are not in a normal economy, we are in Great Depression 2 (GD2) and we're already 1 year into it: we probably have another 5-15 years to go (depending on how badly the government intervenes, so the more intervention, the worse things will get -- if Japan is any indicator, we may even be down 20+ years). We will lose money on our home if we have to sell in the next 20-30 years (or more). Try to put that into monthy equation!

Note that since we'll be leveraged 4:1 (i.e., 20% downpayment), it won't take much to wipe out our downpayment (i.e., 20% decline = zero equity for us). If I ever get unemployed, maybe I too can get a bail out!

Copyright 2008, DannyHSDad, All Rights Reserved.

Sensible Rules (for once)

Interior Department rule issued Friday allows an individual to carry a loaded weapon in a park or wildlife refuge — but only if the person has a permit for a concealed weapon, and if the state where the park or refuge is located also allows loaded firearms in parks.

Now, if only California would turn into shall issue state....

Copyright 2008, DannyHSDad, All Rights Reserved.

Death of a Stranger

Today, the world is a sadder place for me because an ex-anonymous blogger died: Tanta of Calculated Risk. I didn't know her personally and I didn't even get in touch with her via email. But I have read her writings for the past 2+ years or so and I cannot help but cry over her death.

I guess time creates bonds which are not quickly severed and the end creates sadness (for me, at any rate). The other death I can remember crying for rather recently was over Princess Diana which I didn't understand myself but was saddened anyway.

I heard of an acquaintance passing away recently but that didn't make me cry, probably because I lacked the depth of relationship necessary to cry.

I suppose if my paternal grandmother died (she's in her late 90's and still is rather healthy), I won't be crying too much either since I was never close to her (we have never lived close to her all my life and rarely visited her -- especially once we moved to the US: I have never visited her with my parents nor with my sister). Two of my uncles and one aunt died in the past 10 years but I didn't cry for them since I didn't know them very well.

It's sad that today, death is such an unspeakable thing: we see killings and murders on TV but death is pretty much a taboo in this modern era. For me, it's much closer since I have volunteered at nursing home where many (all?) people are in holding pattern before they die (not necessarily a hospice but not too far from it, either) (and have known a few who did die). I have gotten to know many people who faced death in their own ways. (I suppose that for those who do not believe in life after death, it would probably be a too painful exercise of hopelessness.) Also, my mother had breast cancer and a stroke, so death won't be a surprise for me.

When extended families were the norm, people died left and right and it wasn't a huge deal (one reason for having many children was to insure that the family survives infant mortality, etc.). However, now with only one or two children, death is much for shocking -- if you saw the footage from China after the earthquake this year, there were parents who lost all their meaning for life when their only child (with one child policy) died inside a school building.

What can be done about preparing my sons? One reason for the move from Austin to SoCal was to bring them closer to my parents as they face their old age (i.e., death). I suppose having them volunteer at nursing home or hospice would be good so I'll be thinking about it as an activity as my sons finish off high school (if my parent's health deteriorates, the focus will be on the family but if not, volunteering nearby would probably make the best sense).

"Death has been swallowed up in victory."
"Where, O death, is your victory?
Where, O death, is your sting?"
The sting of death is sin, and the power of sin is the law. But thanks be to God! He gives us the victory through our Lord Jesus Christ. [1 Cor 13:54b-57]

Copyright 2008, DannyHSDad, All Rights Reserved.