Year: 2005

THE BUBBLE

Thanks to Toby Gottfried for this highly readable link. Snippets (but read the whole thing if you’re amused by – let alone speculating on the continuation of – the real estate bubble):

‘In 1999, 20% of the second home buyers surveyed by the association said they were doing it for investment purposes. By 2002, it was 37%; by last year, 64%.’

‘A variety of middlemen have sprung up to relieve real estate novices of the burden of doing anything besides forking over a wad of cash.’

‘His own [California home’s appreciation] makes the Colorado duplex he agreed to buy look inexpensive. Balbas, 60, has never been to Colorado and said he had no plans to go anytime soon.’

SOCIAL SECURITY – HIDING THE GOOD NEWS?

This post suggests the Social Security ‘crisis’ may be even less of a crisis than we thought:

Brad DeLong has peered into the archives of the Social Security Trustees Report to look at the question of the missing productivity data and comes to a very interesting conclusion. The methodological rule that “forces” the Trustees to ignore the previous four years’ worth of productivity data was first implemented . . . in 2004. If they had used the methodology that was in place as recently as 2003, they would have projected long-term productivity growth of 1.9 percent per year rather than 1.6 percent. Interestingly, 1.9 percent happens to be precisely the figure used in the low-cost estimate; the low-cost estimate, also interestingly, has been more accurate historically than the intermediate projection, which forms the basis for our misleading public debate on the subject. The media masochists may not like to hear it, but if we get the policy right in terms of continued productivity growth, immigration reform, fighting age discrimination, and improving preventative medicine we may well eliminate the Social Security “crisis” without making any “painful choices” at all. –Matthew Yglesias

(You probably saw that when the five Social Security trustees issued their report, only the three who agree with President Bush were invited to participate.)

This doesn’t mean we shouldn’t tweak around the edges, as I’ve suggested. But those tweaks are the least of what the country needs to do to get back on track.

SMELLING SALTS

Pieter Bach: ‘Smelling salts, or ‘sal volatile,’ were either a compound of scented hartshorn, a natural type of ammonia, and carried in small bottles about the size of a Chinese snuff bottle, or were, for the extremely delicate of sensibility, ‘aromatic vinegar,’ made of any sort of vinegar which was brewed with various natural scents such as flower petals or herbs. Think of popping the top on a bottle of Parsons’ Sudsy and taking a whiff, or pulling the cork on a jug of Antonetti’s Best Red Wine vinegar and breathing deeeeep. Kind of perks you up, doesn’t it? Ladies carried these small vials as a matter of course during the fashion periods when tight corsets were the rule, because the tightness of the lacing (‘Tighter, Mammy, tighter!’) made it difficult to take a full breath – that’s also why Victorian ladies had such tiny appetites in public but managed to get so plump anyway (hint, they took the real meals in private, with their ‘stays’ loosened). Those who smell the coffee and wake up are those who have automatic coffeemakers OR wonderfully considerate Significant Others.’

FINALLY . . .

The Schiavo tragedy may not have been sent by God to aid Tom DeLay in his political difficulties, as he suggested, but at least it has led a lot of people to designate health care proxies (see the next two items for caveats). Reading this from Andrew Sullivan – the conservative Catholic columnist pal – one can only wonder why, after so much media scrutiny and public discussion, these facts are not more widely known. Prime among them:

A CAT scan shows that her brain has since shrunk massively. Her electroencephalogram reading was and is completely flat – she has no brain waves. She is not brain-dead. But she has no ability to think, feel, or communicate.

There’s much more, all of it sad. I urge those who believe an injustice has been done to read the whole thing. Including this piece:

Last weekend, they got the federal Congress back in emergency Sunday session and got a law designed to delay the process of death pending new federal court challenges. President Bush rushed back to D.C. to sign the bill in the middle of the night. You want proof that the religious right runs the Republican Party? What more do you need?

And now, two caveats . . .

> Living Wills . . . Or Won’t They?

Gary Konecky: ‘Thank you for the repeated mentions of Living Wills. There is one point that has not been mentioned. My mother died in an internationally respected cardiac hospital, St. Frances in Roslyn, New York. My mother’s doctor knew about her living will. A copy of the living will was part of the hospital chart. The hospital and its doctors violated each and every provision of her living will. I was to learn subsequently, that it is the policy of Roman Catholic hospitals to disregard living wills. In matters of health care, Roman Catholic teachings take precedence over accepted medical procedure and the patient’s wishes.’

☞ Anyone know how widely true this might be?

> Correction – Medical Power Of Attorney

David Groshoff: ‘Eric Batson (MD, PhD) wrote Friday:

Furthermore (and this is VERY useful for those in non-marriage relationships of ANY sort), the person with the power of attorney has COMPLETE access to the patient’s medical records and is obviously entitled to visit the patient (how can you make decisions for the patient without seeing him or her?). A random member of the patient’s family cannot just tell the hospital to exclude you.

‘While this may be true where Dr. Batson lives, some of this simply isn’t the case in some states, and it’s very important that people be aware of that.

‘First, the person with the power of attorney may not, in fact, have complete (or any) access to the patient’s medical records, unless the Health Care proxy specifically provides for access under HIPAA.

‘Second, as a member of the bar in a state, Ohio, that recently passed the most damning so-called ‘marriage’ constitutional amendment in the country (that impacts all unmarried heterosexual people as well), I can tell you that a health care proxy in no way makes the person named in the health care proxy ‘obviously entitled to visit the patient.’ The advance directive only evidences an intent of the person who is unable to make his/her own health care decisions, and it typically does not state priority of visitation, despite how obvious it may be to Dr. Batson and others who logically ask, ‘how can you make decisions for the patient without seeing him or her?’ Believe me, many attorneys who cater to the gay community have seen this story play out badly many times over.

‘Many courts in my state (as shown in the link above) will in all likelihood bend over backwards to give ‘traditional’ family members preference over those of us who are viewed as strangers in the eyes of our state’s founding document, regardless of whether an advance directive exists, regardless of what’s contained in that advance directive, and regardless of how long we’ve been with our loved one, particularly when *public* hospitals must overtly discriminate against unmarried persons based on the mandates of the state’s constitution.

‘All that said, I agree wholeheartedly with Dr. Batson that having both a living will and a durable power of attorney for health care (as well as perhaps a springing general power of attorney and other documents) in place is indispensable. In fact, executing several of the same advance directives over a period of time, say once every six months (and holding onto the old ones) *and* specifically providing for the same person to have priority of visitation in each one, helps to build up further evidence of the person’s intent.

‘It’s a complicated and important issue. People spend days agonizing over what sofa or car to buy (or what stock or mutual fund to buy/sell), but they often refuse to spend even half of that time dealing with this. Hopefully, the sad situation in Florida will be a wakeup call to everyone to ensure that their wishes, whatever they may be, are expressed as best as they can.’

PEOPLE RESPOND TO INCENTIVES

The oldest houses in Amsterdam are generally narrow because, centuries ago, homeowners were taxed according to their width. It was cheaper to build a long, narrow house than a square one with more street frontage. ‘The narrowest house on the Begijnhof,’ reports a traveler named Andrea, ‘was only five feet wide!’

(And speaking of feet, when the Soviets judged shoe factories by the number of shoes they produced, they tended to produce just one size – it was more efficient. And when, in 1988, Massachusetts upped the threshold of medical expenses one had to incur under its ‘no-fault’ auto-insurance law from $500 to $2,000, the average number of chiropractic visits after an accident jumped from 13 to 30.)

Men may be pigs, but people are pigeons: we respond to incentives.

BUBBLE

Georgia Wong: ‘Just got word from a former neighbor that my dark, airless, viewless condo that I sold in 2003 for $327K is now worth $510K. Oy! If I’d stayed another year or so before selling!!! Arggghhhhhhhhhh.’

☞ I know the feeling! Like selling AMZN at 200 only to see it at 400 weeks later! Let’s just hope the real estate market has a softer landing – as I expect it will.

NEIGH

I have become a horse. Strong like bull, yes, but a horse. I say this because I find myself eating mainly apples and carrots. The carrots became a snack of choice when they started whittling them down to baby size and packing them in Ziploc bags. And the apples zoomed up my ingestion chart when I recently discovered bags of ‘Gala’ Michigan apples. I have no clue where they are really from in March (Mexico?) but they are crunchy, cold and juicy and turn out, astonishingly, to be an even better snack than cookies. So I started reflecting on my life and realized, with equine-imity, that all I need is a feed bag. Well, except that I eat a huge amount of salmon, which has my ‘good’ cholesterol at levels not seen since the days of Methuselah, and horses don’t eat salmon. Never mind.

AND SPEAKING OF APPLES

Does a man holding an apple weigh MORE or LESS than he will after eating the apple? The answer will not likely change the world as Isaac Newton’s apple insight did – I do not expect to be knighted for this. But once I started pondering it (as I ate an apple while weighing myself), I decided that the answer to the question is that he weighs MORE before he eats the apple.

Clearly, you could argue that he weighs less. Indeed, that is how a normal person would probably view things: you weigh less before you eat a big meal (or even a small apple) than afterward. But it is the imprecise nature of the question (‘do you mean ‘does the man-and-apple’ weigh less or just the man, not counting the apple he is holding?‘) that leads me to think that, absent the ability to receive clarification, one is called upon to take the question at its most literal: a man holding an apple. Like a man fully clothed weighs more than a man naked – even though the man does not weigh more.

Now, you say, ‘but you fool, it makes no difference whether the apple is in his hand or in his stomach – the man and apple weigh the same whether the apple is inside or out.’ But that’s not strictly true. To begin with, most men do not eat an entire apple. They toss aside the core or at least the stem, thus slightly diminishing its weight. But even a man who eats the entire thing will weigh less after eating it than he did, holding it, shortly before, because each of us loses weight continuously (until we refuel). You always awake weighing less than you did when you went to bed. Perspiration – even when not noticeable, let alone profuse – takes its toll.

I promise not to write about this again.

LIVING WILLS

Mike Mattes: ‘Please tell your readers to get living wills to avoid all this mess and have their wishes followed. They can go to agingwithdignity.org for info and the forms.’

Joel Margolis: ‘Here’s how to reduce the number of Schiavo-type cases in the future: it should be a requirement of enrollment in Medicare that the individual submit a letter from his physician stating that he has a living will and health care proxy on file. Admittedly Ms. Schiavo wasn’t eligible for Medicare but this would reduce the number of such cases among the elderly.’

Michael Rutkaus: ‘Popular conception is that a Living Will is enough, but that is mainly when death is imminent. A Medical Power of Attorney is also needed so you can assign medical decisions to someone else if you are incapacitated but not about to die.’

Eric Batson (MD, PhD): ‘A living will has problems. If you, the patient, are not conscious and able to defend your living will, a conscious and argumentative relative, who might hire a lawyer, will often get lots more attention from the hospital’s “risk management” staff. Lots of organs are not donated because a relative who is alive and talking tells a hospital NOT to harvest organs that the soon-to-be deceased (and no longer communicative) patient clearly offered for use.

‘A better document is a health care power of attorney. It gives the bearer the legal right to make all the health care decisions on your behalf. That person, as a communicative adult, can be just as vocal about threatening legal action and this gets the requisite respect from hospital administrators. This person is also empowered to make these decisions even if the situation is one not considered when the document was drawn up. Furthermore (and this is VERY useful for those in non-marriage relationships of ANY sort), the person with the power of attorney has COMPLETE access to the patient’s medical records and is obviously entitled to visit the patient (how can you make decisions for the patient without seeing him or her?). A random member of the patient’s family cannot just tell the hospital to exclude you.

‘OK, I am not an attorney, nor do I play one on TV, but I *am* a doctor and have spoken with prominent hospital administrators and organ transplant officials about this issue. I know *my* CD-ROM with ‘hundreds of legal documents for home and office needs’ includes a template for health care power of attorney. Make sure everyone in the family has swapped one with someone else. It can prevent these dilemmas from going into protracted litigation.’

☞ Click here for one of those CD-ROMs.

Alan: ‘As a native Floridian, I have to wonder whether, if this issue had came to light in any other state than one ran by a Bush, the federal government would have jumped to attention as it has? I know from personal experience the pain and heartbreak of having to decide to pull the plug. We lost my 17-year-old sister in a car accident many years ago, and luckily the government did not intervene when we had to make the hardest decision of our life. With all the Republican leadership’s devotion to the sanctity of marriage between a man and woman, why would they even choose to get involved in this intimate issue between the wishes of a wife and her obviously devoted husband?’

But first . . .

Could the Terri Schiavo tragedy be to the current era what Joe Welch’s question to Joe McCarthy – ‘Have you no shame, Senator?’ – was to an era whose fever broke a half century ago?

The President of the United States, who rarely if ever interrupts a vacation, flies back for a dramatic middle-of-the-night bill signing he could just have well done in Crawford? Because he so deeply cares about overturning the decisions of more than 15 judges after more than 34 hearings and appeals including two to the Supreme Court? Even though he signed a Texas law that lets a hospital remove a feeding tube even over the objections of the family?

From Digby’s Blogspot:

By now most people who read liberal blogs are aware that George W. Bush signed a law in Texas that expressly gave hospitals the right to remove life support if the patient could not pay and there was no hope of revival, regardless of the patient’s family’s wishes. It is called the Texas Futile Care Law. Under this law, a baby was removed from life support against his mother’s wishes in Texas just this week. A 68 year old man was given a temporary reprieve by the Texas courts just yesterday.

Those of us who read liberal blogs are also aware that Republicans have voted en masse to pull the plug (no pun intended) on Medicaid funding that pays for the kind of care that someone like Terry Schiavo and many others who are not so severely brain damaged need all across this country. . . .

Those of us who read liberal blogs are aware that the bankruptcy bill will make it even more difficult for families who suffer a catastrophic illness like Terry Schiavo’s because they will not be able to declare chapter 7 bankruptcy and get a fresh start when the gargantuan medical bills become overwhelming.

And those of us who read liberal blogs also know that this grandstanding by the congress is a purely political move designed to appease the religious right and that the legal maneuverings being employed would be anathema to any true small government conservative.

Have they no shame?

OUR MILLION-DOLLAR-A-MINUTE DEFICIT

If you thought the Mogambo link was a little too wacky yesterday, how about this from the Comptroller General of the United States?

(Where he speaks of our $750,000-a-minute deficit, note that he is understating it by nearly half. The true deficit, when you include the cost of the war and the $200 billion we’re borrowing from the Social Security trust fund, is more like $1.3 million a minute. But even with his numbers it is sobering.)

BUYING ON MARGIN

And speaking of massive deficits and the $10 trillion National Debt that the Republican leadership will bequeath our kids when President Bush leaves office . . .

. . . one of the basic tenets of prudent investing is not to buy ‘on margin’ – borrowing to invest. As others have pointed out, the President’s proposed partial Social Security privatization would have us – collectively – borrow trillions more from the Chinese and Japanese, among others, to invest in the U.S. stock market. Have they really thought this through?

SO?

Ron Carford: ‘You linked to the Mogambo article regarding the eventual collapse of the economy. My question is this: How do you suggest one should protect one’s assets? Assuming stocks will eventually collapse, is it safe to keep cash in a brokerage house like Fidelity? Or in a bank? Or in your mattress? In gold?’

☞ Big topic. But even if this bad stuff happens – it certainly may not – I think the banks and brokers will likely be fine (and your account is federally insured against their insolvency). On top of that, diversifying should help. TIPS should hold their value. Investments in foreign stocks and in resource-rich companies could be a significant part of the mix.

PLAYING THE REAL ESTATE BUBBLE (IF THERE IS ONE)

Doug Simpkinson: ‘My wife and I played the real estate bubble by selling our house in the Silicon Valley and buying one slightly farther away (but bigger, in 3 acres of forest) for $100,000 less. This way we still own our (nicer) house, but we’ve extracted six figures from the bubble. Sort of like selling half of your TiVo stock after it shoots up, but imagine the remaining half of your TiVo stock has a mountain view. Or some other horribly strained metaphor.’

REASONS NOT TO FEEL STUPID KEEPING SOME OF YOUR MONEY SAFE

Click here. Very entertaining and frightening at the same time.

Note that our accumulated National Debt since 1776 will have reached $10 trillion or so by the time President Bush leaves office – up from under one trillion when Ronald Reagan took office. Of the $10 trillion, $8 trillion or so will have been racked up under just three presidents: Ronald Reagan, George Bush, and George Bush. (Of course, with inflation, it’s natural that 21st Century deficits would dwarf 19th Century deficits. What really matters is the size of the Debt in proportion to the size of the economy – and which way that ratio is headed. The debt was about 30% of GDP when Reagan took office, will be about 75% when Bush leaves – and is headed in the wrong direction.)

Meanwhile, the ratios of consumer debt are higher also. Our homes ‘appreciate’ (even though they grow no bigger) and we borrow and spend that newfound ‘wealth.’

It may all work out fine. It generally does. But not always.

[So? So? So, as expensive as they are, I’m not selling my TIPS or my oil stocks or my PCL, all of which might be good hedges against inflation.]

And now, just in case you’ve not already read them . . .

TWO VOICES ON THE TRAGIC SCHIAVO MATTER

The first was Congressman John Conyers on the floor of the House Sunday:

By passing this bill, in this form, we will be intruding in the most sensitive possible family decision at the most ill-opportune time. It will be hard for this member [of Congress] to envision a case or circumstance that Congress will not be willing to involve itself in under this precedent.

By passing legislation which takes sides in an ongoing legal dispute, we will be casting aside the principle of separation of powers. We will be abandoning our role as a serious legislative branch, and take on the role not only of Judge, but of Doctor, Priest, Parent and Spouse.

By passing legislation which wrests jurisdiction away from a state judge and sends it to a single preselected federal court, we will abandon any pretense of federalism. The concept of a Jeffersonian Democracy as envisioned by the founders, and the states as “laboratories of democracy” as articulated by Justice Brandeis will lie in tatters.

By passing this legislation, in the complete absence of hearings or a committee markup, and with no opportunity for amendments, in complete violation of what we used to call “regular order,” we will send a signal that the usual rules of conduct and procedure no longer apply when they are inconvenient to the Majority Party.

By passing this legislation, and taking this sensitive decision away from a spouse and giving it to a federal court, we will make it abundantly clear that all the talk last year about marriage being a “sacred trust between a man and a woman” was just that – talk.

My friends on the other side of the aisle will declare that this legislation is about principle, and morals and values.

But if this legislation was only about principle, why would the Majority party be distributing talking points in the other body declaring that “this is a great political issue” and that by passing this bill, “the pro-life base will be excited.”?

If the president really cared about the issue of the removal of feeding tubes, why would he have signed a bill in Texas that allows hospitals to save money by removing feeding tubes over a family’s objection?

If we really cared about saving lives, why would the Congress sit idly by while 40 million Americans have no health insurance, or while the president tries to cut billions of dollars from Medicaid – a virtual lifeline for millions of our citizens?

When all is said and done, this bill is about taking sides in a legal dispute. Last year, the Majority passed two bills stripping the federal courts of their power to review cases involving the Defense of Marriage Act and the Pledge of Allegiance because they feared they would read the Constitution too broadly. Last month, the Majority passed a class action bill that took jurisdiction away from state courts because they feared they would treat corporate wrongdoers too harshly. Today we are sending a case from the state courts to the federal courts even though it is the most extensively litigated “right to die” case in our nation’s history.

There is only one principle at stake here – manipulating the court system to achieve pre-determined substantive outcomes. By passing this law, it should be obvious to all that we are no longer a nation of laws, but have been reduced to a nation of men. By passing this law, we will be telling our friends abroad that even though we expect them to live by the rule of law, Congress can ignore it when it doesn’t suit our needs. By passing this law we diminish our nation as a democracy and ourselves as legislators.

The second is my pal and classmate Jesse Kornbluth, in his blog . . .

The Passion of Terri Schiavo
March 21, 2005 | 6:00 p.m.

The first thing you do when you are waging war against law and reason is to ratchet up the language. . . . [C]onsider the words of Randall Terry, former leader of Operation Rescue – and now the spokesman for Terri Schiavo’s parents:

Yes, hate is good … if a Christian voted for Clinton, he sinned against God. It’s that simple. Our goal is a Christian nation. We have a biblical duty, we are called by God to conquer this country…

There it is, right out in the open. The kind of country they want is everything our Founding Fathers labored to avoid.

A Few Facts You May Not Know
March 21, 2005 | 6:00 p.m.

1) The bill passed by Congress and signed by the President applies ONLY to Terri Schiavo.

2) The President’s decision to cut short his vacation and rush back to Washington made no medical difference to Terri Schiavo:

White House officials acknowledged that the final bill could have been flown to Mr. Bush in Texas, a round trip of six or seven hours that probably would have made no difference in whether Ms. Schiavo lives. Doctors say she can survive for up to two weeks without the liquid meals that have sustained her for 15 years.

Where George Bush Really Stands
March 21, 2005 | 6:00 p.m.

Just last week, the Houston Chronicle reports, Texas pulled the plug on an indigent African-American baby who seemed considerably more “alive” than Terri Schiavo. Who signed that bill? Then-Governor George Bush. Read on:

The 17-pound, nearly 6-month-old boy wiggled with eyes open, his mother said, and smacked his lips. Then at 2 p.m. Tuesday, a medical staffer at Texas Children’s Hospital gently removed the breathing tube that had kept Sun Hudson alive since his birth Sept. 25. Cradled by his mother, he took a few breaths, and died.

How does this Texas law work? Hospitals can stop life-sustaining care – no matter what the patient’s family wants. It just takes a doctor’s recommendation and approval by a hospital’s ethics committee. The family then has 10 days to find a facility that will take the patient. For a poor patient with little or no insurance, this is, in essence, a death sentence.

But first . . .

LEST THE CONGRESS HAVE TO FLY BACK TO OVERRULE YOUR WISHES

Mike Mattes: ‘Please tell your readers to get living wills to avoid all this mess and have their wishes followed. They can go to agingwithdignity.org for info and the forms.’

Steve Strunk: ‘I find it extremely distasteful that the state government of Florida and especially the US Congress should think that they have any cause for action in this case. Given that the courts have already decided in this matter, it would seem that any law passed to over-rule the court’s decision could never stand the separation of powers clauses of the Constitution. I am starting to feel ashamed that I have been a Republican my whole life. Prior to the last election I had never voted for a Democrat. The party that I had always counted on to keep government small and out of these situations has suddenly become the opposite of what I had thought it meant to be Republican. The party is now a big government party imposing its will on the people and trampling state’s rights. This party now knows what is best for everyone and is not afraid to act on this belief.’

R*E*S*P*E*C*T

Rosina Rubin: ‘It took me 13 years to get my husband to register as a Democrat, and he is a good barometer of moderate Republican thinking. George Bush doesn’t embody the Republican Party values in which he long believed; but when he hears Democrats talk scathingly about ‘the Republicans,’ he feels unwanted by the Democratic Party. This language may appeal to the faithful, but if we’re going to win big, we need to reach beyond the faithful. So I’ve been telling everyone who will listen that when we talk about ‘the Republicans’ we need to be specific (i.e. say ‘George Bush’ or ‘Tom Delay’ or ‘the Senate Leadership’ or ‘our opponents on the other side of the issue,’ whatever it is that we mean), but let’s try really hard to not to push the swing voters away by accidentally making them feel that we’re talking about them.’

☞ Exactly right. There are millions of Republicans who agree with the Republican leadership that we should be pushing for a global ban on stem cell research (as we are) . . . borrowing the costs of the war from our children (as we do) . . . drilling in the Alaska National Wildlife Refuge (as soon as possible) . . . tilting the playing field ever more heavily in favor of the rich (as Jesus would have?) . . . retaining the right of FBI terrorist suspects to buy firearms (as the NRA applauds us for doing) . . . tearing down the separation of church and state (lest judges be allowed to decide matters like the Schiavo case).

And even these people’s views should be respected.

But the Republicans I know – and I know a lot of them, including a surprising number of gay ones (albeit no lesbians) – generally lament these positions. They long for the days of the Eisenhowers and Rockefellers and Javitses, and wish that the Bill Welds and Rudy Giulianis could actually play leadership roles in their party. (Bill Weld couldn’t even be confirmed ambassador to Mexico, let alone considered a presidential contender.) In my view, these folks are basically in the sensible center (maybe one click to the right), as the Democratic leadership also is (maybe one click to the left). We need to let them know we’re very close on a lot of issues; and that they should feel warmly welcome in our tent, at least until they get their party back.

And now . . .

PPD

Lajon Webb: ‘I’m an Independent Associate with Pre-Paid Legal Services. Our company was formed nearly 32 years ago to provide affordable access to the justice system for middle-income working people like you and me. Pre-Paid is to attorney fees what major medical is to hospital and doctor bills. In other words, many of the legal services you need most are prepaid through your membership. We place you, your family and your business under an umbrella of legal protection provided by a nationwide network of quality law firms. Here is my website for further information about our company.’

Doug Mohn: ‘PPD is pre-paid legal insurance of questionable value sold through a MLM organization. Andrew Tobias, Consumer Advocate, would tell people to run from this product. Andrew Tobias, stock tipster, is probably going to regret this one. Be sure to tell everyone to sell after the short covering run-up finishes, because long term this company is a dead end just like all pyramids.’

POP

Joe Cherner: ‘It’s obvious to me that the U.S. housing bubble is about to burst. Since I don’t own any U.S. housing, what could I do to bet I am right?’

☞ Buy puts on . . . everything. Except that, of course, you could be wrong, or too early, and lose your entire bet.

GIVE THEM THE WORLD

In a world of Google and Mapquest and that site that gives you a bird’s-eye view of the globe, this is retro at best. But this Barnes & Noble atlas would make an extraordinary gift for the high school student in your family. Or the college kid, except it’s too heavy to take back and forth to college each year (and even if it weren’t, you wouldn’t want to see it go). There is so much in it, from our planet’s place in the Milky Way and phenomenal double-page satellite photos of the continents at night, to a photo of the world’s tallest waterfall, to . . . well, the whole world.

WHY SUPPORT DEMOCRATS?

Alex: ‘Three Democrats — Senators Daniel Inouye and Daniel Akaka of Hawaii and Mary Landrieu of Louisiana — joined 48 Republicans in supporting drilling by voting no. Please explain to me again why I should give money to the Democratic Party?’

☞ Because 48 Republicans voted the wrong way versus just 3 Democrats? And because with Gore or Kerry or whoever comes next, this would never have been proposed in the first place?

1 AMERICAN = 573 SUMATRANS

Gennady: ‘Goes like this: there is a fixed exchange rate between the dollar, pound and ruble: a pound of rubles costs 1 dollar.’

Anna: ‘Re your point yesterday that we see ‘close neighbors as more important than distant neighbors,’ I highly recommend The Monkeysphere. The language is a bit, uh, informal, but the insights and examples are unforgettable. Also relevant, from Jaron Lanier: ‘You have to draw a Circle of Empathy around yourself and others in order to be moral. If you include too much in the circle, you become incompetent, while if you include too little you become cruel. This is the ‘Normal form’ of the eternal liberal/conservative dichotomy.”

☞ The Monkeysphere is fun. But the language is a bit, uh, informal.

ST. AMEX DAY

Sharp-eyed readers will have noticed the green highlights in yesterday’s column, perhaps ascribing them to St. Patrick’s Day. No, it was my exceptionally subtle way of suggesting shares of American Express. You know, the ‘green card’ folks. (Well, originally.) Retailers aren’t crazy about Amex because it takes a bigger slice out of each transaction than Visa or MasterCard. But in the wake of a seemingly decades-long litigation, banks can now offer their customers the Amex card. I think I even saw something from MBNA about switching Visa or MasterCard holders to Amex – presumably to get some of that premium Amex charges retailers. Not to mention what could be decades of newly prosperous Eastern European and Asian travelers, winers, and diners, who just might like the cachet – if our President doesn’t permanently turn the whole world away from anything with the word ‘American’ in it – of carrying the American Express card.

Another item I’ve picked up this week are the January 2007 25 LEAPS of Prepaid Legal Services (stock symbol, PPD; LEAPS symbol, VPXAE) at $11.80. With the stock at $35, you are paying a $1.80 premium for nearly two years’ control of the stock (being able to buy a $35 stock for $25 has an intrinsic value of $10, so paying $11.80 is paying a $1.80 premium). I know very little about the company – and it is controversial to say the least – but one of you who seems to have done his research likes it. (The company is doing well, he says, selling some kind of program to help cover people in the event of identity theft. He expects good results that he believes are not yet reflected in the stock price.)

I would stress, as always, that the sensible thing for most people is to invest steadily in two or three no-load, low expense mutual funds of the type I recommend at the back of my book. And to invest in the market only money they will truly not need to touch for many years. Certainly PPD LEAPS entail significant risk. Click here to see why. But say you’re rich and can afford to risk $11,800 for the right to buy 1,000 shares of PPD at $25 anytime between now and January 2007 (by which time any profit on the sale of the LEAPS would have gone ‘long-term’ and be lightly taxed). And say, further, that the stock rises 50%, to $52.50. Your $11,800 becomes $27,500 ($52.50 less the $25 strike price times 1000 shares), so you have more than doubled your money. More interesting than the return on a savings account – but with the very real risk that you could lose the entire $11,800 (less the value of the tax loss in lowering your income tax).

Have a great weekend. Hop up onto a satellite and take a look back at Earth. Or visit the Monkeysphere.

FREE CALLS

Columnist Robert X. Cringely tells us that Skype and the others will have trouble when the big boys – the big telecoms – start giving better treatment to their own VoIP (voice over internet protocol) calls . . . which will relegate your and my Skype calls to the slimmest pickings of the available bandwidth. But for now, there’s theswitchboard.ca, which requires no downloads and is entirely free. So you and your girlfriend can spend the whole day together, as if she were in the next room (“Honey, how long do you microwave beets?”), even though she is 7,000 miles away. Ah, brave new world.

FREE TRADE

Frank McClendon: “I would like to know what you think of the Lou Dobbs interview in Playboy – ‘America’s Other War – By Outsourcing, Corporate America Kills the

Middle Class and the American Dream.’ The gist:

I’d prefer that corporations return to being good citizens – and because of the dictates of their conscience – end outsourcing. But if corporate America can’t forgo short term profits for the broader interests of our society, it is Washington’s responsibility to act. . . . It seems however that business leaders would rather collect seven-figure bonuses for cutting costs – usually by dumping jobs or shipping them overseas.

☞ I am more of a free trader . . . albeit biased toward using our influence to push trading partners to improve working conditions and environmental regulation – e.g., instituting a “minimum wage” program as suggested here last week.

I understand that family comes first, and that close neighbors are more important than distant neighbors. Ohioans (if you’re from Ohio) clearly outrank Kentuckians, just as we care more about Americans (if we’re American) than we care about Canadians, let alone the French.

But how steep should the curve be? I first wrote about this 35 years ago in a book (The Funny Money Game) that included a “conversion table,” by nationality, as one might show how many pounds or francs or baht or yen there are to the dollar. But it remains a puzzlement even today.

To take a childish example, if you had a choice between one neighbor dying or one Bangladeshi, you’d probably – reluctantly – choose the Bangladeshi. But if it were one neighbor versus two Bangladeshis? Ten? Ten thousand?

Fortunately, with respect to outsourcing, no one has to die (except possibly, indirectly, from the poverty of joblessness). So it’s not as wrenching to come right out and say one American job is worth two or ten or ten thousand jobs in Dhaka.

But there are two other factors that, even so, make it a damnably difficult calculation. Because not ONLY does giving the job to the Bangladeshi help the Bangladeshi . . . but it also lowers the cost of the clothes we buy to keep our kids warm (making clothes in Bangladesh is cheaper than making them here); and, in the long run, enriches us as well as the Bangladeshis, because someday that newly-employed Bangladeshi will be able to buy some product or service WE sell. (And perhaps buy a few shares of the stock that we will need to sell to pay our nursing home bill.)

So I lean strongly toward free trade, but with assistance for those who are displaced here (e.g., extended unemployment and continuing education/retraining opportunities) – and with a very conscious, creative effort to include in our trade agreements progress on wage and environmental issues . . . pushing hard for and making progress on those things . . . but pushing not quite so hard that we kill the deal.

Michael Young: “You argue the U.S. should espouse a global treaty requiring a minimum wage. That all sounds nice, but not even the most labor-friendly politicians believe that is practical or even desirable. Developing countries simply cannot meet the standard; forcing their minimum wages up too soon will likely stifle development. If you limit your statement to developed countries, then it’s a fine one (and it’s largely, but not entirely, met already). The problem is deciding when and how to pressure developing nations, who are indeed siphoning off jobs in the process of growing themselves out of relative poverty. I’m sure you know all that. I just worry when you make these kinds of unqualified pronouncements that they may turn off your more moderate (or even conservative) readers. The rest of us are the choir.”

☞ It could be three cents a day. There must be some acceptable level for any country. And from there, what’s wrong with making it a voluntary goal to do better?

I repeat:

The U.S. should espouse a global treaty requiring each signatory to establish a minimum wage – however low – and requiring “best efforts” to raise that wage each year until it reaches the median minimum wage for all the signatories. All voluntary, but a matter of national pride and, when quantified this way, something to shoot for.

Jonathan Levy: “By definition, half the signatories to such a treaty would always be at or below the median. The only way to meet the goal would be for every country to have exactly the same minimum wage. I realize it is a voluntary goal but does it really help to set even a voluntary goal that is all but impossible to meet?”

☞ In a zero sum game, you’d be right. But what about a world where countries were continuously striving to reach a median that itself, in most years, would be rising? Granted, someone would always be in last place, which could be discouraging. But measured in terms of “improvement,” even countries at the bottom could have something to be proud of. Indeed, starting from such a low base, it’s not impossible that – in percentage terms – the poorest country could see its three-cent-a-day minimum wage (or whatever) rise faster than America’s $5.15-an-hour minimum wage (which has not budged in nine years).

What could it hurt to make a rising minimum wage a matter of pride for poor countries – and not just their shiny new weapons?