The other day I saw an article in the St. Paul Pioneer Press:  The economic-stimulus rebate: Save it or spend it?   Having not yet received my check from Uncle George, I decided to read on.

America needs help. Sue Wagner, an economic patriot, is answering the call.

The Brooklyn Center telecommunications worker used her $600 check — part of the $168 billion national economic-stimulus package — for a spa that was installed in her back yard Tuesday.

“I want this country to be stimulated,” Wagner said.

That’s exactly what government officials want to hear. Checks began to flow from Washington, D.C., this week, part of a program to lift the economy out of the doldrums by boosting consumer spending. Every taxpaying adult is supposed to get $600, plus an extra $300 per child for families. But as officials await the impact of the rebates, a Pioneer Press online survey showed fewer than a third of volunteer respondents would spend the money as officials hoped.

It got me thinking.  Should I blow this thing?  And if I do, will I feel patriotic?

I sat and thought about all the things I could do with an extra $600, and my practical side kept telling me that I should put it on a gas card to combat the ever-soaring gas prices.  Then I thought I should just dump it into my mortgage.   Heck, there are probably a thousand things that I could have done that would have been financially safe and reasonable. 

As I was arriving to work the next day, I got out of my 2000 Cougar, walked toward my building and looked back to confirm that I had armed the car alarm.  As I looked at it I was reminded how old the car was getting, and that it wasn’t looking as good as it used to.  It had a crack in the fiberglass front bumper valence, and my carbon-fiber hood was looking cloudy and discolored (having been subjected to the elements for a few years).  I decided right then and there what I was going to do with that check:  My Cougar was going to get a makeover.

So, I contacted my body shop and scheduled the appointment.  I told the guys while I was there for the estimate that this was a stimulus check expense.  They smiled and a few of them told me that work had been pretty slow lately and that they really appreciate the business.  Apparently people had better things to spend their money on than repairing cosmetic damage on their vehicles, or so I guessed.  I handed over the keys and told them I’d see them in a week.

Well, I recently got the car back, and I gotta say that I couldn’t be happier.  I figure that I killed a couple birds with one stone.  I had fixed up something that had been bugging me for quite some time, and used my chance to stimulate the economy.  I guess the added bonus is that I get to advertise it all over town as I drive around:

Ahh…patriotism!

I listen to the radio personalities on the Twin Cities own KTLK radio just about every day. It’s the local home of national pundits like Hannity, Rush, and Levin, as well as local guys like Chris Baker and Jason Lewis. In other words, it’s a conservative-leaning station dawn ’till dusk bash-fest of all things liberal.  Of course, you wouldn’t have known that based on their brand-new TV spots they’ve been running lately:

click image to watch

As long as “in-depth analysis” of “all the latest news” really means a series of consecutive rants for 3 hours, I suppose the whitewash is acceptable.

I know it’s been a little while since I added another installment to my “Why Obama” series, so I figured that with all the talk here in the Chamber about those obscene gas prices lately it was as good a time as any to highlight the issue. 

There’s been quite a bit of debate over this (with good reason), and a lot of attention has been paid to the fact that Obama is departing from McCain and Clinton with regards to suspending the 18-cent federal gas tax for the summer.  I know that when I first heard about it, my initial reaction was that it was a gimmick and wouldn’t really save people that much.  Of course, I’m no economist, so…

Luckily, the economists have weighed in, as the Obama campaign posted on the “fact-check” portion of the website:

Washington Post Fact Checker: Temporary Illinois Gas Tax Holiday Showed that Economic Benefit Was Minimal and the Majority of Consumers Didn’t Feel They Were Paying Less. “The gas tax moratorium proved politically popular in Illinois, but economically questionable. The Illinois Economic and Fiscal Commission estimated that the state lost $175 million in revenues during the six-month period. A subsequent study by the National Bureau of Economic Research showed that gas prices fell by 3 percent, meaning that only three fifths of the savings from reduced taxes was passed on to consumers. “It turned out to have a pretty small effect,” said Joseph Doyle, an assistant economics professor at the Massachusetts Institute of Technology. “Consumers were slightly better off, but the benefits were spread very thinly, and the government was a lot worse off.” A poll by the Chicago Tribune showed that only 28 percent of motorists believed that they were actually paying less for gas as a result of the temporary suspension of the tax. Obama has changed his mind dramatically on the tax cut since voting for it back in 2000 in Illinois. On the campaign trail Monday in North Carolina, he described the proposal as a “short-term quick fix that we can say we did something even though we’re not really doing anything.” [Washington Post Fact Checker, 4/29/08]

Economists Agree: Most Savings from Gas Tax Holiday Are Passed on to Producers, Not Consumers. “James Hamilton, professor of Economics at the University of California-San Diego, said that most of the benefits from a temporary tax moratorium would likely go to producers rather than consumers. He said that states that suspend gas taxes are able to respond to rising demand more efficiently than the country as a whole, because gasoline supplies can be easily moved from one state to another. “Prices would certainly rise to the market-clearing level,” said Hamilton. “I would expect the price [of gas] to go back to very close to where it was before [the tax cut], in which case consumers would not see any benefit.” Another economist, Jeffrey Perloff, of UC-Berkeley, agreed that a federal tax moratorium would likely have less impact on consumer gas prices than a state moratorium. He said his models showed that a suspension of the 18.4-cent federal tax on gasoline would likely result in a temporary 9 to 12 cent reduction in the cost of a gallon of gas to the consumer, with the remainder of the reduction coming in wholesale prices.” [Washington Post Fact Checker, 4/29/08]

There’s a lot more there there, but the consensus is pretty universal.  In fact, when Clinton was pressed to name a single economist that has endorsed the “tax holiday”, her response was “I’m not going to put my lot in with economists,”, which is an answer that sounded like it came from George Bush.   It kinda begs the question as to who she is putting in her lot with, if it isn’t the experts.

The bottom line here is this is a phony gimmick; an easy thing to propose in light of the current situation as an attempt to buy some votes.   Obama’s position is grounded in reality.

What Obama should do right now is take this and pivot to a reminder to everyone that there are certain easy things we as Americans could do to relieve the financial burden of gas, as long as we’re talking about pennies on the gallon:

At this stage, I’d consider it a patriotic duty to make sure my air filter is clean and my tires are inflated.   hmmm…maybe I should be running a presidential campaign?

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I stopped by memeorandum today and noticed that we may have something of a baton pass in the works, as the media and the blogosphere appears to have gone hoarse from the 24/7 pontificating and debating the cosmic implications of the rhetoric of Obama’s former pastor.  Today’s feature shifts the focus a bit, and it comes with the discovery of a picture that was taken in 2001:

OMG!  He’s stepping on Old Glory!  In 2001!   That’s year 9/11 happened!  Why, Obama is going to pay for this, ’cause he, like, knew him ‘n’ stuff!

I think I’m beginning to see a trend here.  Let’s review the scorecard for the knocks on Obama coming from his opponents:  Flag pin, Rev. Wright, and Bill Ayers.   Next will be Rezco.  I know… people must be saving the attacks on the real ISSUES for later.   Or is this the best they got? 

Speaking of which, a blogger at Just One Minute quips: Reaching? Those Are Warm-Up Stretches 

Lots of details on an unreported link between unrepentant Weatherman Bill Ayers and unforthcoming candidate Barack Obama are at this post, but here is the headline - in 1995 Bill Ayers founded and worked closely with the Chicago Annenberg Challenge, first chaired by Barack Obama.

As if the loose Obama-Ayers connection of a charitable organization is just downright damning or something.  Nope, no reaching going on.   We’ve entered a no-reach zone.  Though I love how every blogger and radio pundit uses the phrase “unrepentant terrorist”.  As if to imply that somehow the attacks would be held back a bit if Ayers was repentant.  Yea right.

Somebody let me know if Ayers is on Obama’s advisory board, ’cause at least they had that to work with WRT Wright.   Till then I’ll just be shaking my head.  Sure, Ayers was/is a radical, but until I hear Obama echoing the sentiment…

Update:  H/T to Sphinx on this one.  Oops.

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Today I spotted this NYT article (via memeorandum): As Gas Costs Soar, Buyers Flock to Small Cars

DETROIT — Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede.

In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car.

The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply.

In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.

I post this as a follow-up to the Gas Price Rant Thread, but also because I work at a dealership (yes, every once and awhile Chamber visitors will learn a little more about ChenZhen the man, and it’s true that I sell cars).

So, I guess I can say that this is hardly surprising to me, but I’m amazed at the change in the market in just the last 6 months.  We can’t give these trucks and SUV’s away, and the cars that many people would have previously laughed and pointed at (like the pictured Chevy Aveo) are now holding their values and flying off the lot.  People are doing the math at this point, and the cost of ownership of these V8 trucks is simply getting outta hand.  

For an example, let’s compare fuel costs between the Chevy Aveo (since I mentioned it) and the Chevy Tahoe (since the NYT mentioned it’s 35% drop in sales in the article), using my 10,660 mi. annual commute to work and back that I used in the “rant” thread:

That’s a difference of $832, or about $69 extra a month…just to drive to work.

Or, if one uses the default EPA estimates of 15K miles/year with 45% hwy and 55% city average, there is a difference of $1264, or an extra $105 a month.  Within the context of buying a new vehicle, it’s definitely going to be a factor because when you’re talking about a $600/month payment on a new Tahoe, you’re really talking about $700/month in relation to picking a more fuel efficient car instead.

The additional problem for those who already own one is that the market is so soft on them that they won’t get squat for it on a trade-in, so you’ll see more and more people flipped upside down on their payments (lingo we use to describe a situation where the owner owes more on their vehicle than it is worth), perhaps to the point that they can’t get out of it even if they wanted to.   We’re seeing these people more and more.

It’s getting rough out there, let me tell ya.  

Well, maybe if you ask that question, like…

50,000 times.

This is a media-driven controversy now.  The ironic paradox, I suppose, is found in watching the pundits on the cable news networks spending countless hours discussing how said countless hours of coverage will effect Obama politically.   It’d be a kind of a self fulfilling prophecy made effective by the principle of social proof; if enough people are talking about how it (the controversy) hurts Obama, then the impression is created to the casual observer that there is something in it all that should hurt him. 

The reality outside of the bubble is, of course, we’re still left where we started on this story, which is the same relatively weak guilt-by-association meme that’s been there all along:   Rev. Wright says controversial things, and he’s Obama’s former pastor.   Sure, there may be some arguments there about judgement in churches, and you can take that as you may.  But there really isn’t anything new here that moves that ball otherwise. 

But unfortunately, the prospect of this prophecy being effective has forced Obama to come out and make a statement on it and in turn adding to the drama a bit further.   And as someone in one of the plethora of cable news ”panel’s” pointed out, it is unlikely to end there, since they’ll undoubtedly stick a microphone in Wright’s face asking for a response.   And so on…

I’ll hand these media talking heads one thing though, in that they sure have an uncanny way of glossing over their own role in the whole thing.

For related reading, Glenn Greenwald sarcastically opines Why the Jeremiah Wright story deserves more attention , and HotAir pointed out that Amy Holmes may have predicted over a month ago that this circus was all part of Obama’s plan (I’m not sure if I’ve reached that conclusion yet, but it is interesting).

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If you won’t vote for Obama because he doesn’t wear a flag pin, what does that say about you?

I only ask, because it seems that Obama had to address this issue one more time* on Friday.  With everything that’s going on in this country, whether it’s the economy, Iraq, energy, health care, or anything else, I can’t believe that someone would actually bring this up as a dealbreaker. 

*The media obviously feels this is important to people, as this is the story they gleaned from the Kokomo town hall.

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First off, name this graph:

If you guessed “Exxon Mobil’s stock price for the last 5 years” (or something similar), congrats, you nailed it.   As it turns out, Exxon is also the most profitable Fortune 500 company for the 5th year in a row as well.

Then we have this graph:

This one charts gas prices over the last 90 years, adjusted for inflation. I couldn’t help but notice that the adjusted price hit the lowest point right before Bush took office, has steadily increased during the last 8 years, and managed to hit the highest point ever today.

Anyway, I’m going to leave any rants or theories on this for the comment section.   I’ll try to add more later when I have time.

Update:  Since I’ve recently taken my 2000 Cougar (yes, my car has a website too!) out of the garage, I’ve decided to do what a lot of people are doing these days, and track my fuel economy and wrap my brain around this.  I’ve never really paid too close attention until lately, so I finally made it over to fueleconomy.gov to see what the official EPA estimates were for my car MPG wise:

(yes, I inserted the pic of my car in there, so what?)

Now, I don’t do a lot of driving around in this car.  The vast majority of my driving is to work and back and is highway miles (20.65 one way, according to mapquest).  I’ve given it 2 days now and some of my engine mods notwithstanding, the EPA estimate seems pretty accurate.  The digital readout in my dashboard is reading and average of 26.8 MPG.  Not too shabby, I guess, considering it is a V6 with 66K miles on it.

Anyway, the fueleconomy.gov site has a neat calculator that allows me to figure out how much this is actually costing me over time.  To make the math easy, I’ll just figure out how much I’m spending to get to work and back.  Let’s see…I’ll round it to 41 mi/day X 5 days/week x 52 weeks/year = 10660 miles.  If I go with a rough guess that 85% of that is highway miles, the EPA calculator gives me an annual cost of….

That’s $1559 a year, in GAS…. just to go to work  (assuming the prices stay constant, which of course they won’t).  That’s a pretty serious chunk of dough!  Of course, if I drove a 2008 GMC Yukon, I’d be rockin it at over $2000, so I suppose I should look at the bright side.  But DAMN!  It really puts things into perspective, and gives you an idea of how much money one can save by either living closer to work or driving a more fuel efficient car.

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I can’t believe people get paid (a lot more than me, I would guess) to do this stuff:

I’ll just never understand.

I should feel ashamed of myself for even entertaining this lunacy here in the Chamber, but since the story appears to have gone viral and somewhat mainstream, and I’ve spent a few moments commenting on it on other blogs, I might as well drag it in here for the WPPBA and the rest of my visitors.

Usually an analysis is followed by a verdict, but for this I’m going to do it backwards.  Bottom line:  NO, Obama did not subtly flip Hillary Clinton the bird in his speech yesterday. 

Good grief.  As if the premise alone doesn’t work sufficiently against the accusation, check out the evidence (h/t Balloon Juice):

Nothing, however, was going to stop both those in the Hillary camp and those on the right from seeing what they wanted to see, and declaring Obama’s actions to be childish and indecent.  One pro-Hillary blogger was so obsessed with it that he/she sat down in front of their computer and painstakingly composed a replay video of the event, complete with slo-mo and closeups:

One of my favorite hangouts, Hot Air, actually went from initially labelling the scrutiny “moronic” to, a few hours later, posting a thread about how Obama might have “let his guard down” and how the crowd “clearly recognized it”:

Obama has a pretty satisfied look on his face afterwards, which makes it look a little more purposeful than not. It’s subtle enough to have deniability for anyone who might get offended, but clear enough for his followers to enjoy the moment of disrespect towards Hillary. And who hasn’t wanted to flip off a Clinton at some time in their lives?

And Larry Johnson completely lost me as a fan as he spent the better part of a day and posted not one, not two or three, but four times making the accusation.  And this is a guy who used to work for the CIA.* 

How embarrassing.

*Update:  My apologies, as those posts weren’t posted by Johnson himself, but rather contributors to his blog.  But still…

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