It’s not turning car companies into government agencies that bothers me so much as turning the government into a car company. And not a car manufacturer, you understand. I mean a car dealer. The kind with the big lot on the edge of town covered in balloons and promoted incessantly by radio 
commercials with catchy jingles.
This trend kicked off in March when the president announced new car warranties backed by the government. That was on top of an assortment of other incentives then in place to get folks to come on down and kick the tires, such as a temporary deduction for state sales taxes and tax credits (a. k. a. rebates) for hybrids.
The latest gimmick under consideration by our national dealership is a version of the old "we’ll pay you $1000 for any trade" scheme. Working its way through Congress is a cash-for-clunkers promotion. Turn in any drivable car with mileage at least 10 MPG worse than what you are buying to replace it and Crazy Uncle Sam will pay you $4500. Hurry hurry hurry. At these prices these deals just won’t last.
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It’s the first Friday of the month, so it’s time to review all the exciting recent developments in the frugalosphere.
May was a month of themes, some old, some new. In the old category there was the ongoing frugal controversy over toilet paper. We were cheered to read that a California county stopped buying four-ply tissue. Much of 
California’s current budgetary troubles are no doubt traceable to this luxury. And the Frugal Duchess shared a related tip: flatten the roll "a bit" so it doesn’t roll so easily and waste paper.
But then One Caveman’s Financial Journey had a long and well researched post making the case that, in the long run, more expensive toilet paper is actually cheaper. Apparently, his research shows that a person uses less of the good stuff, resulting in a net savings of $0.002 (a fifth of a penny) per bathroom visit. We will have to wait for other frugal scientists to reproduce these results before we accept his findings.
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Many years ago (19 to be exact) an otherwise unknown research firm put out a report on the average amount of time spent during an American’s life doing various mundane tasks. It was presented in terms of years, so many years spent watching TV, so many washing dishes, and so on. The media loved it 
and widely reported the numbers along with the obvious commentary that we Americans were wasting our lives with trivia and drudgery.
Except that to anybody who thought to do some simple math in their head, the numbers were hilariously implausible. I wish I could find a copy of the report now, but this was in the pre-internet dark ages. My possibly faulty recollection is that they said we spend an average of 6 years in the bathroom.
If you don’t think about it, and want to write about how we spend too much time alone in a tiny room, 6 years sounds just believable enough to use. But if you do some quick calculations, you realize something is very wrong. Assume the average life expectancy is 72. (About right and it makes the math easy.) Then each year of your life is 20 minutes per day. Two hours a day in the bathroom? Every day? Average?
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I’ve always wanted to invent my own derivative. I realize some of you may think that’s strange, but for a finance geek like me, it’s only natural. And I think I’ve come up with a good one.
It’s for people without appropriately large emergency funds to live off if they lose their job or otherwise fall into financial distress. I call it the Expensive Loan Option, or ELO. The way it works is that you pay me a fee of $X per year and I guarantee that you will be able to get a loan at any time during that year for $5X at 20% interest. So, for example, if you want to be sure of being able to borrow $10,000 at 20% interest at any time during the next year, just pay me $2000 and you can sleep soundly.
Excited? Well, of course you are. Perhaps you have a nice job and enough liquid assets to pay four months of expenses should something nasty happen. That’s okay, but the Fabulous Suze Orman has told you that you need eight months worth of liquid assets. No problem! Just buy an ELO from me. If it costs you $3500 a month to support that glam lifestyle of yours, then just sign up for a $14,000 ELO for the modest fee of only $2800. I take PayPal.
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A little over two months ago I wrote a long and ponderous post on the administration’s scheme to help homeowners in trouble and cure the housing crisis. I wasn’t very nice about it. I cruelly suggested that it might not help the 1 in 9 homeowners that the Treasury suggested might be helped. I feel bad about that. I even implied that the strong moral leadership provided by the Treasury’s guidelines would not be enough, that actual legislation would be required.
You must understand, this was in early March, back when things were really grim. Unemployment was rising and house prices seemed to be falling every month. I let my despair overcome my natural American optimism about all the good that government can do if we all chant “Yes, we can!”
Now that May has brought warmer weather and a buoyant stock market, let’s revisit the administration’s housing effort with all the optimism and cheerfulness that it deserves. So two months into it, how is it going? Great. Well, pretty good. Not bad. To be honest, fair. A little less than expected, but it’s still early days. Okay, really crappy, but we’re working on it.
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commercials with catchy jingles.
Cars, Government, Musings | Frank Curmudgeon | 
June 12, 2009 12:30 pm | 
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