Serious Thinkers™ in all corners of the web return to some common themes, even when those themes are currently out of the public spotlight. Recently, those Serious Thinkers™ have been reading between the lines on topics which the public has moved on from – the effect of the minimum wage on unemployment, and even more to the point, the effect of the minimum wage on specific segments of the population. And why shouldn’t they? The current official unemployment rate is 9.2%, but the official unemployment rate among those with a Bachelor’s Degree or higher is a relatively healthy 4.4%.
In 2006, Former President George Bush signed a well intentioned law which allowed companies to automatically enroll employees in the company retirement program – and to automatically choose the investment in which they were enrolled. The Pension Protection Act of 2006 authorized companies to automatically enroll new participants and enroll them in three types of funds – lifecycle funds, balanced funds, and managed accounts – while absolving the companies of any financial liability for losses in the funds. As expected, the law has effectively increased the rate of participation in company 401(k) accounts.
Sorry to miss the news cycle (I bought a house, as I alluded I might in my slightly pessimistic earlier real estate postings), but I wanted to share the perfect example of the incentives and disincentives of tax laws. As predicted a while ago, California finally passed a law which stated that any out of state businesses which had affiliates in California would have to collect taxes when consumers in California purchased goods from the mother company. A few other states have already passed similar laws, nicknamed ‘Amazon Taxes’. Overstock.com and Amazon.com (disclosure: this site was technically an Amazon affiliate) immediately announced plans to cut off California affiliates.
There is a German word which perfectly describes a feeling we often get… in English-Speaking America. “Schadenfreude” means to derive pleasure from the misfortune of others. Generally, when schadenfreude appears in print, it refers to the failings of a high powered sports team, such as the New York Yankees or (not this year!) the Los Angeles Lakers. These teams are historically so good (note I left out my favorites, the Boston teams, although they could certainly apply) that other sports fans will cheer for two things – their team to win, and team X to lose! On that note, today I bring you a link which will most likely make you happy – and the ‘team’ is Bank of America.
Every few months, we here at DQYDJ like to check in on the market’s expectations of inflation. There are lots of variables in the market – not least of which is the ending of the Federal Reserve’s open market purchase of bonds known as Quantitative Easing 2.0. Still, even with the conflicting signals of historically high gold prices, ridiculously low mortgage prices, and out of control commodity prices, the market isn’t pricing out of control inflation. As a matter of fact, the inflation that it is pricing in is decently low. Enough rambling, let’s take a look.
Interesting article in the New York Times the other day: “Is Your Religion Your Financial Destiny?“. The Times took the income line of $75,000 and plotted the percentage of members of various religions who make more than that amount (2007 Numbers). The top three religions, when it comes to high income members? Reform Judaism, Hinduism, and Conservative Judaism.
Guess what? DQYDJ actually entered a carnival last week!
- Check out “The Housing Double Dip“, which was hosted at the Carnival of Personal Finance over at (our newfound and liked blog!) Control Your Cash. In fact, subscribe to them while you’re over there!
I hear you: DQYDJ needs to enter more Carnivals. Fine, we will!
‘Conventional’ knowledge, until the last couple of months, was that home prices bottomed in late 2009. Recent data on home sales shows a local maximum in 2010 followed by a further decline – leading some economists to believe we are now in a “double dip” where housing prices will continue to decline in the immediate future. The most recent data point is from Zillow, estimating that (a record) 28.4% of all single family homes are currently underwater – meaning mortgage holders owe more than their house would sell for on the market. Full disclosure: I’m currently testing the real estate market on the buy side.
The earthquake and tsunami disasters in northeastern Japan have the entire world buzzing about disaster preparedness. This usually entails a disaster kit complete with water jugs, flashlights, radio, canned goods, and bags of kibble for the cats and dogs, but there’s one aspect the media has beenneglecting: financial preparedness.
Here at DQYDJ, we like to write about things that have unintended consequences – a perfect example is the Alternative Minimum Tax, which was intended to stop the very rich from having a 0% tax rate. Of course, since that tax was not indexed for inflation, it has creeped its way into the middle class’s check book. Today we’ll link you to an article on another distortion of the AMT – deepening the “Marriage Penalty”, a situation where two singles would be better off, tax-wise, staying single as opposed to marrying.