Well, the economy’s bad, so not only are people turning to Spam, they’re also turning to pot pies.  Thirty-dollar pot pies, that is.  We’re not talking about the cheap 3-for-a-$1 Banquet stuff, but these:

Twin Hens(TM) has experienced a record 300% growth since 2005. Their delicious Pot Pies are available in Dean & Deluca, Whole Foods, Wild Oats, QFC, Rice’s Epicurean Fairway and over 300 independent stores across the country.

Twin Hens sells 4-serving chicken pot pies for $28 and 4-serving beef pot pies for $30.

Hard times, folks.

Dorothy posted this at 11:39 PM EST on Tuesday, November 18th, 2008 as Grumblin Mumblins, It's Economics - Stupid!

No Comments »

In all honesty, why do Spam sales increase during economic downturns? The New York Times makes it sound like it’s the only thing poor people can afford that “resembles meat.” I’ll grant that I don’t do much grocery shopping in New York, but here in Texas Spam is $4 a pound. Flippin’ pork tenderloin is $2.88/lb at Sam’s Club, and $4/lb at a normal grocery store. Other meats that are less no more expensive than Spam: pork chops ($2/lb), ground beef (lean ground chuck should go for $3/lb; fattier varieties go for $2/lb or less), fresh fish ($1/lb for tilapia if you know where to shop, $4/lb if you don’t), sirloin steak (regularly goes on sale for $4/lb), ham (Smithfield hams are never more than $3/lb), turkey ($.49/lb this time of year; never more than $2/lb), and chicken ($3/lb should buy you boneless, skinless breasts not on sale; everything else is cheaper, and I buy my chickens whole for no more than $1/lb, normally getting a whole chicken for less than a pound of Spam costs - a whole frickin’ chicken!).

I’m not a Spam basher; I like a Spamburger every once in a while, though I don’t get adventurous in cooking with it. But it’s not the case that Spam is cheap. Ramen is cheap. That crappy ground beef in the freezer section that sells for $.79/lb, that’s cheap. Mac and cheese and instant potatoes, the other foods mentioned in the story as increasing in sales, are both cheap.

What would explain it is if people are not just poor, but poor and some combination of lazy, bad cooks, and/or bad shoppers. If you’ve got $3 and you can either salt and pepper a pork tenderloin and cook it to the correct doneness, or you can open a can of Spam, slice is, and put it in a skillet until you feel like taking it out, the latter is somewhat easier and requires no cooking skill whatsoever. Spam also has the advantage of never going bad, unlike fresh meat. Though if people are broke and jobless and moping around without hope because it’s the worst economy since the Great Depression, maybe they could make a little time to buy fresh food regularly instead of buying 100 pounds of Spam twice per annum.

And those other meats are probably healthier (Spam is loaded with calories), reducing the amount the plebs will have to gripe about being fat and not having health insurance. And they all taste better as part of a well-rounded, healthy, and inexpensive diet.

I think we need to force high school kids to take home economics. The thought that people are turning to Spam as poor food upsets me. There’s so much better and cheaper food out there, even if Spam’s not bad from time to time.

Update: I just saw a commercial for a whole, cooked chicken from Boston Market for $1.99. Can’t say I particularly like Boston Market, but that’s cheaper than a can of Spam, and it’s significantly more food. And it’s significantly healthier.

Apollo posted this at 3:01 PM EST on Saturday, November 15th, 2008 as Grumblin Mumblins, It's Economics - Stupid!

7 Comments »

After seeing other flailing companies get $700 billion, and the car companies asking for $25 billion just two months after getting $25 billion, can we really begrudge American Express a measly $3.5 billion? Both parties now agree that it is the job of taxpayers to save large corporations from their own stupidity. This one sounds like a bargain.

I propose a new federal department, headed by a new cabinet secretary, overseeing the transfer of wealth from taxpayers to corporations. At present, this is being done in a haphazard way where only the worst corporations get money from me. But if American Express is getting money for doing badly, how much more should Discover get for not doing badly? $35 billion? And what about the mom and pop grocery store down the street. I never stop there because the place looks like a dump, but they’re staying in business during a recession, and we should reward that sort of behavior. $3.5 million for them would probably do.

But I’m no expert on these things. Which is why we need a cabinet secretary who would know precisely how much money we should take from wealthy Americans and give to large corporations. Or perhaps how much new money we can print and give to large corporations. That might be even more fun . . .

Apollo posted this at 10:05 AM EST on Wednesday, November 12th, 2008 as It's Economics - Stupid!

6 Comments »

Now that the government is a shareholder in banks, Thomas Friedman lays out some possible unintended consequences:

Let’s imagine this scene: You are the president of one of these banks in which the government has taken a position. One day two young Stanford grads walk in your door. One is named Larry, and the other is named Sergey. They each are wearing jeans and a T-shirt. They tell you that they have this thing called a “search engine,” and they are naming it — get this — “Google.” They tell you to type in any word in this box on a computer screen and — get this — hit a button labeled “I’m Feeling Lucky.” Up comes a bunch of Web sites related to that word. Their start-up, which they are operating out of their dorm room, has exhausted its venture capital. They need a loan.

What are you going to say to Larry and Sergey as the president of the bank? “Boys, this is very interesting. But I have the U.S. Treasury as my biggest shareholder today, and if you think I’m going to put money into something called ‘Google,’ with a key called ‘I’m Feeling Lucky,’ you’re fresh outta luck. Can you imagine me explaining that to a Congressional committee if you guys go bust?”

And then what happens if the next day the congressman from Palo Alto, who happens to be on the House banking committee, calls you, the bank president, and says: “I understand you turned down my boys, Larry and Sergey. Maybe you haven’t been told, but I am one of your shareholders — and right now, I’m not feeling very lucky. You get my drift?”

Maybe nothing like this will ever happen. Maybe it’s just my imagination. But maybe not …

(H/T)

I really hope there’s a sunset provision to the government ownership of stock in the banks.  It could take decades to get the government out of the bank ownership business.

Hubbard posted this at 11:01 AM EDT on Tuesday, October 28th, 2008 as George Bush Sucks!, It's Economics - Stupid!

No Comments »

In Argentina, politicians are planning to punish people who saved their money for retirement; President Kirchner plans to nationalize individuals retirement accounts:

Argentine President Cristina Kirchner announced this week that her government intends to nationalize the country’s private pension system. If Congress approves this property grab, $30 billion in individually held retirement accounts — think 401(k)s — managed by private pension funds will become government property.

That the state could seize retirement savings no doubt seems outrageous to Americans. But it is a predictable development in a country where government intervention in the financial system is the norm. With Washington now expanding its role as guarantor in American banking, that’s something to think about.

Could it happen here?  Yes, actually.  The House Democrats are thinking about ending 401(k) accounts (H/T):

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.  House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal. At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

First, we already have the social security tax of 12.4% (6.2% from the worker, another 6.2% from the employer).  Second, instead of being able to invest in mutual funds that, over decades, average 8-10% annual interest, we get 3% government bonds. 

Let’s do some math for a not-so-hypothetical worker named Hubbard, age 27, who saves a large chunk of his salary because he’s a touch neurotic.  For 2008, he saves approximately $10,000 and receives a partial match from his employer of $2,000 for a total savings of $12,000.  If he plans to retire in 2045 at age 65, and his interest compounds at 7% (a low ball long run figure), then according to this calculator, from that one year of saving and investing alone he’ll have $156,951.   Now let’s say he does as the government could mandate, saving 5% of his salary, which would be $2,370, plus gets $600 from the government, for a total savings of $2,970.  Invest that for the same amount of time in government bonds earning only 3%, and at age 65 he’ll have $9,132.  That’s a difference of $147,819.

NOW COMPOUND THAT DIFFERENCE OVER DECADES OF INVESTING.  That’s a lot of lost money.

It won’t do to say that our hypothetical worker should invest the difference in another account.  Ed Morrissey explains:

The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.

That means your employer can no longer write off their contributions to your 401(k), and your capital gains would be taxable year-on-year.  In other words, it becomes just another investment or savings account, with no tax benefit at all, and no employer contribution.  Instead, Uncle Sam would give you your “matching” funds — up to a whopping $600 per year!  Whoopee!

As Michelle Obama says, you could buy a pair of earrings every year … except, of course, you can’t.  It’s in The Lockbox, defined by politicians as Locked Away from You but Accessible to Us.  It goes there along with 5% of your gross earnings, apparently to play with the 7% of your gross earnings that already goes to Social Security.  And what do they do with the money?  They give you government bonds as your only investment option.

Maybe you’ll be lucky, and they’ll have Franklin Raines running the agency issuing those bonds.

Let’s pray this bad idea goes nowhere.

Hubbard posted this at 2:08 PM EDT on Thursday, October 23rd, 2008 as The Democratic Congress, It's Economics - Stupid!

2 Comments »

Tom Bevan has a worthwhile post, with an astounding graphic.

That doesn’t seem sustainable. There comes a point at which you can no longer borrow your way out of problems.

Apollo posted this at 10:51 PM EDT on Monday, October 13th, 2008 as Amer-I-Can!, It's Economics - Stupid!

No Comments »