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Politics / Money Required Reading: The Self-Delusions of "Self-Sufficient" Americans

Posted by Eli Sanders on Mon, Feb 13, 2012 at 6:00 AM

LINDSTROM, Minn. — Ki Gulbranson owns a logo apparel shop, deals in jewelry on the side and referees youth soccer games. He makes about $39,000 a year and wants you to know that he does not need any help from the federal government.

He says that too many Americans lean on taxpayers rather than living within their means. He supports politicians who promise to cut government spending. In 2010, he printed T-shirts for the Tea Party campaign of a neighbor, Chip Cravaack, who ousted this region’s long-serving Democratic congressman.

Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.

Don't stop there, and don't miss the map.

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Education / Money Tuition Skyrockets as Incomes Stay Flat

Posted by Goldy on Wed, Feb 8, 2012 at 5:21 PM

As I pointed out yesterday, it's not the cost of a public university education that's skyrocketing in Washington state, it's the price. For example, in constant dollars, spending per student at the University of Washington has remained relatively flat over the past couple decades. At the same time, the legislature has slashed higher education funding, forcing the UW and our other public college and universities to make up the difference through higher tuition.

In 1990, the state subsidized almost 80 percent of the cost of a resident baccalaureate degree. Today, the state's share has fallen to 30 percent.

So, how much of an impact has this funding shift had on the typical Washington family? Well, with median family income almost completely stagnant, it turns out, quite a lot:

Economic Opportunity Institute

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Education / Money It's Not the Cost of a College Education That's Skyrocketing, It's the Price

Posted by Goldy on Tue, Feb 7, 2012 at 4:42 PM

About a decade ago, when we prepaid four years of tuition for our daughter through Washington's GET program, a lot of financial advisors disparaged such "529" investment plans as too conservative. Sure, tuition had been rising at about twice the inflation rate for decades, but the roughly six percent annual return we could expect was far below the historical 10 percent average returns one sees from stocks.

Still, we looked at it as a kind of insurance policy; worst comes to worst, our daughter would always have tuition and fees paid for at a state university. One less thing to worry about. But as it turns out, largely thanks to several years of double-digit tuition increases, we beat the market. The $42 per credit we paid in 2002, would have returned $102.23 per credit for the 2011-2012 academic year.

Not a bad return.

That said, it is very important to note that it's not the cost of a college education that's skyrocketing, it's the price.

University of Washington

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Money Three Capitol Hill Banks Hit By Vandals Last Night

Posted by Cienna Madrid on Tue, Feb 7, 2012 at 12:44 PM

Note: I began writing this post at 8:something and then got busy doing other things and/or weeping gently in a broom closet somewhere. Some of you might regard this as slightly-stale news by now but as I'm confident that half of slog commenters awake at noon or after, I thought I'd post anyway.

As Grant noted in the morning news, vandals smashed windows at three banks on Capitol Hill last night—a WaMu, Key Bank, and US Bank—continuing Seattle's months-long trend of hatin' on banks.

Police are pretty positive that last night's incidents were all related—the banks are all within waltzing distance of each other, the calls came in simultaneously, and the suspects have all been described as a mask-and-hoodie-wearing crowd.

These incidents build on a trend that goes back to last November, when two banks were vandalized, including a US Bank branch sprayed with "Occupy Oakland" tags. In January, two more banks banks were hit—a Wells Fargo "Occupy Oakland" tags and broken windows and a Chase Bank ATM found armed with explosives.

Two obvious questions jump out: Are the (now) seven cases of bank vandalism reported since November related? And are they the work of Seattle's gasping Occupy movement?

The short answer is, police aren't sure, as they currently have no suspects to question. Last night's vandalism included graffiti on some walls, according to SPD Detective Mark Jamieson, including "typical anarchist symbols and things like that" but "I don't believe there was anything that said, 'Brought to you by Occupy Seattle.'"

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Money / LGBTQITSLFA / Olympia The Politics of the Possible

Posted by Goldy on Thu, Feb 2, 2012 at 10:46 AM

If you had asked the conventionally wise a decade ago to put odds on legislative approval of full marriage equality a mere ten years hence, last night's remarkable senate vote would have appeared an unlikely long-shot.

Democrats had been trying and failing for years, simply to add sexual orientation to our state's anti-discrimination laws. Gay marriage? It was a distraction. In fact, more than that, gay marriage was the bogeyman at the bottom of the slippery slope that opponents hyperbolically used to squash public support for civil rights legislation.

And yet, last night, marriage equality leapt over its biggest hurdle, passing the state senate not in a squeaker, but by a decisive 28-21 margin that included four of 22 Republicans. That's about as close to bipartisanship as we get in this state when it comes to social issues.

A lot of activists and politicians played a role in last night's victory, and I don't mean to dis any of their contributions, but a big chunk of the credit goes to Senator Ed Murray, whose disciplined, gradualist strategy—even in the face of harsh criticism from others in the LGBT community who complained that he was moving too slowly—appears flawless in light of the final results. Sure, opponents will still likely gather enough signatures to put the issue before voters as a referendum, but given the way senate fence-sitters toppled over on the side of equality (not to mention the favorable public opinion polls), the odds are that this time next year, our local wedding industry will be booming with new customers.

Happy days, and all that.

But there's another issue that, ten years ago, establishment Dems would've said you were smoking crack if you thought you could move it, and one that honestly, has a helluva a lot more impact on most Washingtonians than whether that nice gay couple next door can legally tie the knot. Of course, I'm talking about tax restructuring: Moving Washington from the most regressive and most sales-tax dependent state in the nation, towards one that begins to tax income and/or wealth in a fair and sustainable manner.

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2012 / Money / Election Burner Leads Quarterly Money Race in 1st Congressional District

Posted by Goldy on Wed, Feb 1, 2012 at 8:59 AM

Yesterday was the deadline for candidates to file their Oct-Dec 2011 fundraising reports with the Federal Election Commission, and an opportunity to size up the relative strengths of the candidates thus far. There is only one competitive congressional race in Washington state at the moment—the crowded contest in our newly redrawn 1st Congressional District—so that, for now, is the focus of my attention.

Candidate	4Q-11 Contributions	Cash on Hand
Darcy Burner	$127,875	$ 89,013
Laura Ruderman	$ 76,184	$187,763
Steve Hobbs	$ 61,718	$ 86,573
Roger Goodman	$ 47,203	$ 53,357
Darshan Rauniyar	$ 29,890	$114,966

As you can see, among Democrats, Darcy Burner was the hands down winner in last quarter's money race, despite having one third less time to beg for cash (she didn't declare until November 2). Suzan DelBene didn't declare until after the quarter ended, so she's not included in the totals, but her ability and willingness to self-fund assures that she will outspend her rivals. (Late yesterday, DelBene issued a press release touting the $122,250 she's raised since announcing, so she's no doubt in the lead for the next quarterly results.)

As for cash on hand, Laura Ruderman leads that category with $187,763, though she risks losing her advantage if she doesn't pick up the pace. Meanwhile, Roger Goodman and Steve Hobbs are prohibited from raising money during the current legislative session, so they'll surely lose further ground on the money leaders between now and the next report.

Of course, money isn't everything. If it was, everybody else would just get out of the way and let DelBene run unopposed. But it is a somewhat imperfect measure of both the candidate's work ethic, and their appeal.

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Retail / Money / Teh Internets Amazon Disappoints Wall Street on Lower than Expected Sales and Falling Margins

Posted by Goldy on Tue, Jan 31, 2012 at 2:51 PM

So, you know that old joke about the retailer who sells items below cost, but claims he'll make it up on volume? Well, Amazon's latest earnings report is kinda like that:

Amazon.com Inc. (AMZN), the world’s largest Internet retailer, missed analysts’ fourth-quarter revenue estimates and reported a 57 percent decline in profit, dragged down by shipping costs and the money-losing Kindle Fire.

Sales rose 35 percent from the previous quarter to $17.4 billion, but that fell short of the $18.3 billion Wall Street consensus. Net income fell to $177 million, or 38 cents a share, down from $416 million and 91 cents in the year ago quarter. That actually beat analysts consensus projection of 16 cents a share.

But perhaps what most disappointed Wall Street was the soft guidance for the current quarter, which came in at between $12 billion and $13.4 billion in sales, and a possible quarterly loss, compared to the $13.4 billion to $14.9 billion analysts had been projecting. Shares fell about 10 percent in after-hours trading.

As for the Kindle, Amazon says it sold 177 percent more units than in the previous holiday quarter, but once again didn't release any actual numbers. That's a healthy increase, but I'm wondering if it's as healthy as most observers expected?

In any case, Amazon CEO Jeff Bezos doesn't seem to be too worried about slim margins or quarterly results, instead choosing to sacrifice short term profits as part of a long term strategy. Time will tell.

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Money Bipartisanship Isn't Dead!

Posted by Charles Mudede on Tue, Jan 31, 2012 at 12:57 PM

Behold:

Sens. Tom Harkin (D., Iowa), John McCain (R., Ariz.) and two colleagues Tuesday are introducing legislation that would kill off the dollar bill in favor of dollar coins, touting the move as a way to cut costs over the long run.

“Promoting the dollar coin is a smart investment for our country that saves taxpayer’s money,” Harkin said.

Will this spell the end of the gambler's roll? (Brendan Kiley explained to me that a gambler's roll is the opposite of the traveler's roll—I sadly only knew the gambler's roll from its racist name, which I picked up at my British standard all-boys school. It has always surprised and embarrassed me how colonial-era antisemitism was so easily adopted by black Africans.)

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Money / Olympia Will Roadkill Dems Kill Capital Gains Tax Proposal?

Posted by Goldy on Tue, Jan 31, 2012 at 12:17 PM

Sporting the most regressive tax structure in the nation by far, and facing relentlessly negative revenue forecasts at a time when the budgets of less sales-tax-dependent states are beginning to recover, you'd think a capital gains tax would be a no-brainer for Washington state. A five percent excise tax on capital gains (profits from the sale of stocks, bonds, and real estate), with a $10,000 exemption, would raise over $500 million a year, while impacting only the wealthiest three percent of households.

That's money we desperately need to pay for K-12 schools, public universities, prisons, parks, and everything else state government does. And with capital gains highly concentrated in the hands of the rich—96 percent goes to households with incomes over a million dollars a year—such a tax would constitute a small but welcome step toward tax fairness.

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Politics / Money Meanwhile, at the Broadway Wells Fargo

Posted by Eli Sanders on Mon, Jan 30, 2012 at 3:27 PM

Says Sage Wilson of Working Washington: Uncle Sam on Broadway near a Wells Fargo ATM, bringing attention to the banks $0 federal income tax bill and (peacefully) calling on them to pay their fair share.

According to Sage Wilson of Working Washington: "Uncle Sam on Broadway near a Wells Fargo ATM, bringing attention to the bank's $0 federal income tax bill and (peacefully) calling on them to pay their fair share."

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Politics / Money Coming This Lunch Hour: A Different Kind of Protest Against Wells Fargo

Posted by Eli Sanders on Mon, Jan 30, 2012 at 10:26 AM

This morning's window-breaking at the Madison Park Wells Fargo branch happens to coincide with another—much less violent—protest against Wells Fargo that's set for later today.

The group planning the protest: Working Washington.

The reason:

While the rest of us are getting our tax forms in the mail and getting ready to pay our fair share, a recent report from Citizens for Tax Justice showed that Wells Fargo has paid $0 in Federal income tax on more than $50 billion in profit in the last few years.

Working Washington's non-violent protest will involve people dressing up as Uncle Sam and the Statue of Liberty and standing outside various Wells Fargo locations—in Belltown, Capitol Hill, Mount Baker, and West Seattle—during the lunch hour. The point: "As healthcare, education, and other critical services are threatened with budget cuts, we need big companies like Wells Fargo to pay their fair share. Then we'll have the resources we need to create good jobs by investing in the future of our communities."

UPDATE: Sage Wilson, spokesperson for Working Washington, says of today's earlier Well's Fargo protest: "Our campaign to get Wells Fargo to pay their fair share is completely peaceful & nonviolent. People have good reason to be angry at big banks not paying their taxes, but violence against people or property is never the right way to express that anger."

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Money / Economy Freddie Mac Bets Against America

Posted by Goldy on Mon, Jan 30, 2012 at 8:46 AM

It is easy to argue, post real estate bubble, and all the stupidity and excesses revealed in its aftermath, that lending standards should be tighter. But... well...

[P]ublic documents show that in 2010 and 2011, Freddie Mac set out to make gains for its own investment portfolio by using complex mortgage securities that brought in more money for Freddie Mac when homeowners in higher interest-rate loans were unable to qualify for a refinancing.

Those trades "put them squarely against the homeowner," PIMCO's Simon says.

Freddie Mac's trades came at a time when mortgage rates were falling to record lows. Millions of homeowners wish they could refinance, but their lenders tell them they can't qualify for today's low rates because of tight rules. Freddie Mac is one of the gatekeepers with the power to set those rules, and lately, it has been saying no more often to homeowners.

So there you have it. Freddie Mac, whose partial mission is to "expand opportunities for homeownership," is making money by betting against high-interest rate homeowners being able to refinance at lower rates, at the same time it is making it more difficult for these homeowners to do so.

And you wonder why so many middle class Americans believe the system is stacked against them?

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Crime / Money Since When Did Financial Mismanagement Become a Crime?

Posted by Goldy on Thu, Jan 26, 2012 at 1:52 PM

One gets the feeling that if we regulated our banking industry the way the Swiss regulate their soccer clubs...

Swiss authorities say they have arrested the Chechen owner of Neuchatel Xamax, hours after the soccer club said it would file for bankruptcy.

Geneva prosecutors said in a statement Thursday that Chechen businessman Bulat Chagaev was arrested to prevent “financial mismanagement.”

... we wouldn't have a banking industry.

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Media / Money / Olympia Needed Projects + Low Interest Rates + Low Construction Costs + New Jobs = Smart Debt

Posted by Goldy on Thu, Jan 26, 2012 at 9:44 AM

I suppose the Seattle Times editorial board had no choice but to oppose the proposed construction jobs bond, as it's supported by unions, and the editors are contractually obligated to gainsay organized labor, no matter the issue. Or something. I just wish, in making their arguments, that they'd be a little more forthright with their readers:

Public debt should be for big, expensive things that are needed and that last a long time, like the Tacoma Narrows Bridge. Building bridges does create jobs, but creating jobs is not the right reason for building bridges. If that is the reason, it is likely to be a bridge the world can do without.

Yeah, but, the so-called "jobs bond" does not actually propose any new construction projects. It would merely speed up construction of projects—roads, bridges, schools, waste water treatment, etc.—that are already on the books, but for which we don't currently have the money to finance. These aren't bridges to nowhere, as the editors imply. These are infrastructure and maintenance projects that will all be built eventually, though at an ever higher cost, the longer we put them off.

Whether it's $1 billion or $2 billion, the jobs bond is all about timing, taking advantage of low interest rates and construction costs, while creating thousands of jobs at a time of high unemployment.

Yes, the state would be taking on more debt, and if the editors want to argue in favor of fiscal austerity, no matter the circumstances, have at it. But please don't mislead readers about what this debt would buy.

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Education / Politics / Media / Money Follow the Money on Rising Tuition Costs

Posted by Goldy on Thu, Jan 26, 2012 at 7:05 AM

I myself found President Obama's State of the Union line about withholding federal funds from colleges and universities that raise tuition too quickly, to be both odd and misguided. So I don't disagree with the Seattle Times editorial board, that much of the blame for dramatically rising college tuition falls on state legislatures that have slashed funding for public university systems, forcing more of the cost onto students.

But, um, where do the editors think these legislatures get their money?

Yes, Washington's legislators have consistently failed to adequately fund both K-12 and higher education, to the tune of arguably billions of dollars of a year. But they've done so at the same time our state's daily newspapers have relentlessly editorialized against any and all proposals to raise substantial new tax revenues.

So if the Seattle Times really wants to find the root causes of our collective failure to pony up the cash necessary to educate future generations, they should follow the money (or lack thereof)... a trail that will surely lead back to their own op/ed pages.

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Tech / Money Unscorched by Kindle Fire, Apple Posts Record Quarter on Better than Expected iPhone and iPad Sales

Posted by Goldy on Tue, Jan 24, 2012 at 2:04 PM

Apple blew past analysts' expectations today with another record earnings report, fueled by better than projected sales of iPhones and iPads. For the quarter ending December 31, Apple reported profits of $13.06 billion, or $13.87 per share, on revenue of $46.33 billion, up from $26.74 billion, and $6.43 per share, in the year ago quarter. On average, Wall Street analysts had expected Apple to report $10.06 per share on revenue of $39 billion.

Sales were better than expected across Apple's product line, but especially for its cash cow iPhone, which sold 37.04 million units versus 30.2 million expected, and the iPad, which sold 15.4 million units compared to the 13.2 million street estimate. If iPad sales were negatively impacted by Amazon's bargain-priced Kindle Fire, you wouldn't know it from these results.

Apple now has $97 billion of cash in the bank, enough to fight a small war.

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2012 / Money / Economy Unearned Income Inequality

Posted by Goldy on Tue, Jan 24, 2012 at 12:07 PM

Washington Budget & Policy Center

One further thought on unearned income, and the economic consequences of taxing it at a lower rate. After decades of fast growing income inequality, our nation's top one percent of households now rake in 24 percent of all income, a rate decried by critics as obscene and unsustainable. Yet that disparity is nothing compared to unearned income, where the wealthiest one percent enjoy over 75 percent of all income from capital gains.

As can be seen from the above chart, this preferred rate on capital gains is one that almost exclusively benefits the wealthiest Americans. But whether you think this is fair or productive or not is beside the point. This policy of cutting tax rates on the income of our wealthiest Americans, at the same time income inequality exponentially grows, means that an ever larger portion of our economy is being taxed at an ever lower rate, significantly contributing to federal budget deficits. And with larger deficits come larger spending cuts, disproportionately impacting, you guessed it, those lower and middle income families whose incomes have remained flat for decades, even as the wealthy prospered.

This is redistribution of wealth, plain and simple. Though not in the direction most folks generally infer from the phrase.

All the more reason to levy a capital gains tax here in Washington state, to help fend off further cuts to education, healthcare, and other essential services.

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2012 / Money The Protestant Wealth Ethic and the Spirit of American Capitalism

Posted by Goldy on Tue, Jan 24, 2012 at 9:16 AM

What Atrios said:

Romney has said he was unemployed. He's right. He actually does nothing to earn most of his income. He's just in possession of a giant pile of cash. He pays some people to do stuff with that giant pile of cash so it earns a rate of return. And because we are ruled by horrible people who think the lives of the 1% are more important than everyone else, the tax rate on any money that pile of cash earns is much lower than it is on the money earned by people who actually work.

There's a reason why they call it "unearned income." It's because this income isn't earned. And yet, over the past few decades, we've managed to flip our entire tax system on its head so as to favor this sort of income over that earned from doing actual work.

We simply don't value work in America anymore. And we sure as hell don't value workers. Just listen to the Republicans' vehement defense of so-called "job creators," inherent in which is an implied derision of those who merely perform those jobs. As if "giving" somebody a job was an act of charity in itself.

Raise the issue of income equality and Republicans scream "class warfare," and yes, in raising this issue I am advocating a bit of class warfare, if not a war of aggression. But the problem is deeper than that. As a nation, our values are fucked. Ours is a culture that celebrates speculation and derides hard work, that puts a dollar value on everything, and then sorts society from high to low. It is our Calvinist heritage taken to its pathological conclusion, in which the so-called "Protestant work ethic" no longer has anything to do with actual work.

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Money / Olympia Important Reminder: Washington Is a Wealthy State

Posted by Goldy on Thu, Jan 19, 2012 at 12:18 PM

John Burbank has created a lot of useful things over the years, including the Economic Opportunity Institute and a former Stranger news intern. But as legislators attempt to close yet another billion-dollar-plus budget gap, his latest column is a must read:

Our state will become $25 billion wealthier over the next two years (that’s how much our economy will grow). And yet for some reason, we can’t seem to find enough funding to keep up with public priorities. So we will likely see tuition at Everett Community College break the $4,000 mark, and the University of Washington will probably charge over $12,000. Class sizes in elementary school will top 30 kids or more. More people will be kicked off of Basic Health, right at the time when even more low-wage working people need health insurance.

Because of our over-reliance on the sales tax, we are hurting the vast majority of middle-class and low-income families, and we are leaving a lot of money on the already overflowing table of riches of the wealthy.

I've discussed it before, but it's worth repeating. No state relies more on the sales tax than Washington, a tax that cannot keep pace with economic growth. And since we continue to rely on a tax base that represents an ever shrinking portion of the total economy, state and local government continues to shrink relative to the total economy too, and with it, government's ability to maintain services at current levels.

It's simple math. And there's no reversing or even slowing this trend without substantive tax restructuring.

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Media / Money I'm Guessing My Credit Cards Would Have Burned Longer

Posted by Goldy on Wed, Jan 18, 2012 at 12:54 PM

Jesus... how many more credulous headlines do I have to read about the Mt. Rainier snowshoer who kept himself warm by burning money: "$6 fire kept lost hiker going during Mount Rainier ordeal."

It's a somewhat amazing survival story and all that, but a "$6 fire" is what kept him going? Really? It wasn't even six ones, but rather a one and a five. What's that... ten seconds or so of warmth? I mean, a 66-year-old man is lost in a blizzard on the side of a mountain for two days—and survives—and all the headline writers can focus on is: Ohmigod... he burned money!

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2012 / Money Your Tax Rate Is Probably Higher Than Mitt Romney's

Posted by Paul Constant on Tue, Jan 17, 2012 at 10:30 AM

Today, Mitt Romney said his tax rate is "probably closer to the fifteen percent rate than anything."

This video is from ThinkProgress, which says Romney also qualified the amount he made in speaker's fees as "not very much." According to ThinkProgress, "not very much" in Romney-land is $362,000. That's how much he made in speaking fees between February 2010 and February of 2011.

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Money This Is Where Your Haircut Money Goes

Posted by Bethany Jean Clement on Tue, Jan 10, 2012 at 7:31 AM

...or at least where it went for a while:

windermerecoachellavalley.com

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Money Tipping Musicians at The Royal Room

Posted by Grant Brissey on Mon, Jan 9, 2012 at 2:06 PM

The newly opened Royal Room in Columbia City has a novel—at least in contemporary band payout terms—approach to tipping the musicians.

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Money Burning Money: Caption This Photo!

Posted by Grant Brissey on Mon, Jan 9, 2012 at 11:03 AM

398706_312573362120270_100001028258544_986306_724568374_n.jpg

Photo by Curt Woodward, who says: "Taken this morning at the former Tully's on Market St in Ballard."

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Transportation / Money 520 Bridge Cheapskates Ruin My Morning

Posted by Goldy on Mon, Jan 9, 2012 at 10:15 AM

It took me half a fucking hour to cross the I-90 bridge westbound this morning, between the Island Crest onramp and the Rainier Avenue exit. Fuck.

Here's the deal. I live in southeast Seattle, but my baby mama lives on Mercer Island, where our daughter goes to high school. Which means I cross the I-90 bridge more days than not, either dropping my daughter off or picking her up, or both. On days like today, I'll make two round-trip crossings, both of them during rush hour.

Say what you will, but this arrangement is by circumstance, not choice. Real life isn't always convenient... and for me, it just got a helluva lot less so with the start of 520 tolling.

The alternative—tolling I-90 so that the traffic evens out between the two bridges—isn't exactly an attractive option for me either. At $3.50 each way, my two roundtrip rush hour crossings would cost me an extra $14.00 a day. Even as a part-time parent, I'd be looking at paying more a year in I-90 tolls than my car is actually worth.

And yes, I suppose my daughter could take transit, but we're talking two bus transfers, and at least an hour commute. It's hard enough getting a teenager out of bed at 6:30 AM, let alone out the door.

The only other option—spending less time with my daughter—isn't one.

Yeah, I know: boo-hoo, world's smallest violin, and all that. But for all the commuters thrilled to pay the 520 toll for the privilege of zipping across the lake at 65 mph, there are many more people like me for whom the new normal amounts to a huge new expense and/or inconvenience. That said, this is the new normal, and as expensive/irritating as it is for me, it doesn't shake my support for regional tolling as both a funding mechanism, and a means of (gasp) "social engineering."

But I don't have to like it.

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Music / Money US Music Sales Increased 6.9% in 2011

Posted by Grant Brissey on Thu, Jan 5, 2012 at 11:18 AM

Dig in right over here if you like to do that sort of thing!

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Books / Money Barnes & Noble to Separate E-Books from Physical Books?

Posted by Paul Constant on Thu, Jan 5, 2012 at 11:07 AM

Wall Street Journal says:

Barnes & Noble Inc. said it exploring a plan to separate its successful but costly Nook electronic-book business as it warned investors that full-year results would show much more red ink than previously forecast.

Shares sank nearly 24% in Thursday morning trading.

"We see substantial value in what we've built with our Nook business in only two years, and we believe it's the right time to investigate our options to unlock that value," Chief Executive William Lynch said.

I guess it makes sense; e-books and book retailing are two completely different businesses, and trying to run them both under a single umbrella must be unwieldy as hell. Still, I think Barnes & Noble is officially in Too-Important-to-Fail territory nowadays—bad news from the only physical book retailer in many American markets is bad news for everyone.

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Transportation / Politics / Money Social Engineering

Posted by Goldy on Tue, Jan 3, 2012 at 10:54 AM

The Washington Department of Transportation reports that traffic was down about 37 percent on the 520 floating bridge this morning, the first day of post-holiday tolling.

The decline is roughly in line with estimates on the impact tolling would have on the bridge, which costs drivers up to $3.50 — plus a $1.50 surcharge for those without the stickers — during rush hour. When the tolling began Dec. 29, traffic was down even more at nearly 50 percent, but that was during the holiday week between Christmas and New Years.

The decline was in line with estimates because people respond predictably to economic incentives by changing their behavior. That's the notion behind long term plans to implement congestion pricing in the region as a means of regulating traffic—tolling plans critics typically berate as "social engineering."

It's true. But you know what else is a form of social engineering? Freeways.

Providing toll-free roads on the taxpayers' dime also changes behavior, by incentivizing people to drive their cars more often and further distances. You can argue whether that's a good or a bad thing, but it's social engineering nonetheless, and it's the kind of social engineering that has built suburbs and strip malls, and has generally reshaped our nation over the past 75 years or so.

So while you could say that traffic on the 520 bridge is down 37 percent in response to the new tolls, it might be equally accurate to say that traffic had been inflated 37 percent due to the prior lack of tolling.

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Money When Sharks Attack Sharks

Posted by Charles Mudede on Tue, Jan 3, 2012 at 8:57 AM

BP attacks Haliburton...

BP Plc seeks to have Halliburton Co., its cement contractor for the Macondo well project whose blowout set off the 2010 Gulf of Mexico oil spill, pay all of the oil company’s related costs and damages...

BP and Halliburton accuse each other’s employees of making critical mistakes that caused the blowout of the London-based oil company’s well off the Louisiana coast in 2010.

Sharp teeth meets sharp teeth, insatiable hunger meets insatiable hunger, void meets void.

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