A little more than a year ago the Obama administration announced a scheme to help mortgage borrowers in trouble, in which the loans would be modified in a way that would make the terms more affordable. I thought it was unlikely to 
work as promised and said so at the time. The plan was greeted with some widespread skepticism, although a lot less than I thought was warranted.
At the time, I assumed that what lukewarm enthusiasm it did garner from the media was due to a bias in favor of government intervention in general and this administration in particular. Now I am not so sure. I think it may be that the journalists charged with explaining the scheme to others did not really understand the fundamental flaws so obvious to so many of us.
The latest update on the plan’s progress in the New York Times repeats what has become a recurring theme, that the scheme is at least an order of magnitude less effective than envisioned. But read the text closely and you get the impression of true disappointment and surprise at this failure. The piece contains not a hint of discussion of why the plan failed, as if it was a unfathomable act of nature, rather than something that many thoughtful people accurately predicted from the start. And it ends with finger pointing.
The Treasury is being accused of moving the goalposts a bit. It now says its intention was merely to offer help to those four million borrowers, not to make sure they actually got it.
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Are you eligible for food stamps? Are you sure? Why not check here and find out? Unfortunately, the rules vary from state to state and are pretty complex within each one, so I can’t give much in the way of useful guidelines.
But I’m guessing the rules are a lot more permissive than you think. They probably grant food stamps, or Supplemental Nutrition Assistance as it is now technically called, to folks you probably do not think should be eligible, possibly including you.
I know this from an article now reverberating around the blogosphere that was posted Monday at Salon, Hipsters on Food Stamps. (I am nowhere near hip enough to read Salon. I found it from thoughtful commentary the next day called Using Food Stamps at Whole Foods, on The Big Money, which I do read.)
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SmartMoney, which I scan occasionally on-line, but which is still apparently a real magazine printed on paper, currently has a cover story that includes a bit
called Life Plan: Make Your Home Pay Off. It is just one section of a larger feature on planning personal finances. I cannot bring myself to read the other bits.
As an exercise in laying bare the state of mainstream personal finance advice and/or journalism, let us examine this piece in detail. It’s not long, at seven paragraphs and 532 words. I should be able to get my hands around their advice and, if necessary, refute it without too much fuss.
Paragraphs 1 and 2 tell us about a retired couple, Bob and Linda Gillet of San Diego, who live a life of European cruises and dinners out. They can do this because they paid off their mortgage early.
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Heard about the secret millionaire of Lake Forest, Illinois? I’ll assume not and recap. Grace Groner was born in 1909 and graduated from Lake Forest College in 1931, just about the worst year of the 20th Century to enter the job market. Luckily for her, she landed a position as a secretary at the then 
obscure firm Abbott Laboratories. She was a secretary there her entire career, retiring at age 65 in 1974. She never married and lived modestly.
So far, it’s a story that could be called poignantly mundane. But add in a few more facts and it transforms into a personal finance parable that will be repeated, and probably distorted, for some time to come.
In 1935 Groner bought three shares of her employer’s stock. From that day on, she reinvested the dividends and never sold a share. She past passed away this January, having reached 100. Her estate, including what is now a $7 million position in Abbott, was left to her alma mater, Lake Forest College.
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Yesterday the US Postal Service put out a press release Postal Service Outlines 10-Year Plan to Address Declining Revenue, Volume: Seeks Flexibility on Operations, Delivery; Possible 2011 Price Increase.
For fans of the good old USPS (there must be a few out there) it is grim reading. Mail volume is projected to decrease from 177 billion items in 2009 to just 150 billion by 2020. On its present course, the USPS is projected to lose a total of $238 billion over the next decade, a number that makes the shortfalls in Detroit seem relatively manageable.
The AP story on this was headlined Postal Service’s emerging model: Never on Saturday. The media seems to believe that delivery six days a week is a hot button of some kind. Personally, I don’t care very much. Deliver my mail three days a week if you like. Last year Gallup found 66% of Americans favor dropping Saturday to save money.
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work as promised and said so at the time. The plan was greeted with some widespread skepticism, although a lot less than I thought was warranted.
Government, Housing, Media | Frank Curmudgeon | 
March 19, 2010 12:59 pm | 
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