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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On Monday a guest post at I Will Teach You To Be Rich disclosed the secret formula to saving $71,000 in mortgage interest payments.
There are things I like about I Will Teach You To Be Rich. Ramit Sethi, its owner and usual author, is anti-Latte Factor and even more obsessed with 
Suze Orman than I am. And he’s often quite funny. But the blog also awfully gimmicky. And the scheme to save on your mortgage is a classic gimmick that’s been knocking around for years now and should probably just be put out to pasture already.
The very specific sounding $71,000 mentioned in the post’s title turns out to be an arbitrary estimate of what you could save in interest, assuming a particular rate and principal amount. The way you do this is through bi-weekly payments.
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One of the things I have learned writing this blog is that I have no power to predict which topics and posts are going to be popular. Sometimes I write what I think is an insightful and even controversial post and it gets five ho-hum comments and 
no links. Then I write what I think is a forgettable few paragraphs on a unimportant topic and next thing I know there are 30 impassioned comments and links to it all over the web.
My post last week on LifeLock’s legal woes fell into the surprisingly popular category. I thought it was a modestly interesting wrinkle on a rather unexciting topic. I didn’t understand what a hot button identity theft is for some, and what a great business it is for others.
Controversy and money is a combination I can’t stay away from, so I decided I needed to learn more about identity theft. It hasn’t been going that well. It seems the more I read the more confused the picture gets and even answers to some basic questions become more murky and ambiguous the more I dig.
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Most people, including experts and even sometimes this blogger, use what I call the Black Box Theory of Stock Market Returns. It isn’t really much of a theory. The idea is that the internal workings of the stock market are basically mysterious and unknowable by mortals. The best you can do is to observe what has happened historically to people who have put money into the box 
and average their results.
So we find that the S&P 500 return has averaged X% over some number of decades and we conclude that over the long run that is what we will get from the stock market. You may not get X% in any given year, but you should expect to get that as an average over a long period, because that was the average over a long period in the past.
This is not an entirely unscientific approach. It is objective and makes appropriate use of data. But on reflection it should be pretty clear that it is not all that scientific either. It lacks any sort of explanation of how or why the market returned X%. Maybe there was something that was driving the market up in the past that will not apply in the future. It’s possible.
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The 208th Carnival of Personal Finance is up at Money Under 30. The host did an excellent job, except that he mentioned witnessing the world’s largest lobster roll, at 60 feet long, and named this week’s edition in its honor, but did not provide a photo.
My oh-so-clever post from last week on any printed number being believable is there, way down at the bottom. Placement was not an editorial choice, it’s what I get for writing something that is best categorized as “other”.
There are a bunch of posts in the carnival worth the read. A post on the fact that Thomas Jefferson was in in debt his whole life is worth it because, apparently, this is not common knowledge. I blame public schools.
There’s a post making what I would think is a non-controversial point that you can save money by buying your dog cheaper food. It’s worth reading because the one comment it got argued it was wrong. Also, there’s a picture of a puppy.
Tough Money Love had an appropriately cynical and mildly hostile post on the government bailout and takeover of GM. I liked that. But I was disappointed by a post entitled Making love with money is my favorite kind of romance. I was hoping for something more edgy, possibly with tips on using Craigslist.
commercials with catchy jingles.
Cars, Government, Musings | Frank Curmudgeon | 
June 12, 2009 12:30 pm | 
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