Would you rather pay $399 now and $20 a month for two years, or $199 now and $30 a month for two years? If you are a rational consumer, you probably prefer the $399 deal. The other one is like a $200 loan at 20% interest.
And yet, according to a long and meandering article from yesterday’s New York Times on the madness of cell phone pricing schemes, we wacky Americans preferred the iPhone at $199 with a $30 data plan over the previous deal of $399 with a $20 plan. I’m not sure I buy that. iPhone sales could have increased for a number of reasons, including the fact that the $199 phone was an upgraded version. Still, the Times piece does bring up a number of peculiarities about the economics of cell phones.
In case you live in a cave, I’ll explain that here in the Land of the Free we "buy" heavily subsidized cell phones from the companies who run the cell phone networks and in exchange agree to a service contract with that network, generally for two years. The cell phone company takes a loss on the phone and makes it up on the service end.
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This is the fourth in a series inspired by a toy at CNNMoney. Previous installments covered housing payments, emergency funds, and asset allocation.
Today’s topic really ought to be a lay-up. The tool asks "How much of your portfolio is invested in your employer’s stock?" Obviously a trick question. The correct answer is so clearly zero, barring special circumstances or incentives.
Alas, no.
In a bear market, it’s tough to find a safe haven – a lot of the stocks in your portfolio will be sinking too. But don’t compound the risk by holding too much in any one stock. Best to keep it below 10%.
This bit of psuedo-wisdom assumes and implies so much that is wrong that I hardly know where to begin.
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There is a movement amongst earnest policy wonks that might be called Nanny State Light. It’s a compromise position between full-on centrally planned we-know-what’s-best-for-you 
control and you’re-on-your-own-kid libertarianism.
The idea is that instead of making people do the right thing or hoping that they do what’s best on their own, you give them a little nudge and hint in the right direction. This is, I am told, the topic of a clever and popular book, Nudge, which I haven’t yet gotten around to reading. (But I bought a copy a few weeks ago. That’s something, isn’t it?)
The latest scheme along these lines to hit the media is in today’s Wall Street Journal. Apparently, all we need to do to get people to save more money is to send them a text message reminding them to save more money.
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This is the third in an occasional series inspired by a toy at CNNMoney. Previous installments covered how big your housing payment should be and emergency funds.
Today’s topic is asset allocation, which in the dumbed-down context of the CNNMoney "tool" means the 
percentage of your savings to put in stocks. If you type in that your age is 45 and that you’ve got half your kitty in the stock market, you get a big red flag and a warning. But maybe not the warning you were expecting.
Uh-oh… Looks like your portfolio is invested too conservatively. Stocks can provide good growth, but pose plenty of risks in the short-term. Bonds offer more stability. If you’re saving for retirement and want a quick idea of what percentage of your portfolio should be in stocks, subtract your age from 120.
So at 45 the right answer is 75% in the stock market. In fact, from experimenting with it a little I find that for a 45 year-old anything between 65% and 84.9999% gets the "Good Work" pat on the back.
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It’s time for another visit to the world of survey results. As I wrote when I last visited, poll numbers are not my favorite kind of numbers, but they are way better than no numbers at all. Particularly on economic issues, poll numbers are less informative than how people and companies actually spend money,
but they are way more useful than mere words put out by people like me. (Note I said "like me" not "me". My analysis is always first-rate.)
If you know the world through words from the media, some of the numbers the pollsters find may be jarring. For example, Gallup recently found that 45% of Americans think there is too much government regulation of business and industry and only 24% think there is too little. That’s a fairly wide margin in favor of less regulation, but what may be truly surprising is that in the past year that plurality has widened. In September 2008, just before it all hit the fan, too much beat too little by 38%-27%. In fact, 45% is the highest number in at least a decade.
You might have thought, and I will admit to having thought this, that the Great Recession had won over enough converts to the unbridled-capitalism-is-bad camp that there was now a broad consensus that we needed more regulation, with only the details of what and where to be worked out. Turns out the opposite is true. The GR seems to have, miraculously, won over more people to the less-government-is-better-government side. Go figure.
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Economics, Media | Frank Curmudgeon | 
November 16, 2009 12:59 pm | 
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