Category: Economics (Page 3 of 6)

When Do You Anticipate Retiring?

November 30, 2023 / Richard Nestoff / 0 Comments

This website posts the results of an interesting poll conducted by Harris of 2000 adults.

This chart shows at what age a generation feels that a person can retire given the current economic environment. The site compares the retirement age from the poll know compared to the retirement age from a poll taken a year ago. Clearly, every generation feels the economic environment now is significantly worse than it was a year ago. I’d be curious if this information exists for the year before the Covid shut down.

Gen Z (1996 to 2012) are very early in their careers, so may be in college or unsure about careers. The survey was only people over 18, so kids in school didn’t count. Perhaps they expect that in decades, the general trend is favorable. I, and probably they, don’t know anyone who has retired at 49 or 54 years old. It’s interesting that the year slipped 5 years. That indicates a lack of confidence in the long-term trend.

As the generations get older, the change from a year ago is smaller. That makes sense in that there are fewer uncertainties with few decades to go to retirement.

According to Gallup, in 2022, the average age to retire was 61 years old. Boomers (1946 to 1964) are 59 to 77 years old. Almost all of the Boomers should be retired. It’s not at all clear why the expected year of retirement is so far off. The survey doesn’t say, but perhaps only working people responded. Any Boomer not currently retired may feel that retirement isn’t likely in the near future.

What Annual Salary is Necessary to be Happy?

November 29, 2023 / Richard Nestoff / 0 Comments

Can money buy happiness

This website posts the results of an interesting poll conducted by Harris of 2000 adults.

It’s interesting that the generations agree on the required annual salary to be happy, with the exception of the Millennials. Boomers (1946 to 1964) are at or nearing retirement, so may be making that much or stable in retirement. Gen Z (1996 to 2012) are very early in their careers, so may be in college or unsure about careers. The survey was only people over 18, so kids in school didn’t count. Gen Z has an amazingly realistic annual salary requirement for people who may still be on their parent’s health insurance and cell phone plan.

What went wrong with the Millennials (1981 to 1996)? They aren’t making anywhere near the salary they require to be happy. Way off. The oldest, at 42 years old are mid-career, and should have a good idea what is realistic. The youngest, at 27 years old, should be early in a career, but haven’t bought a house. They should be developing some sense of what’s coming up, but apparently not. At that age, it’s difficult to imagine that something amazing will happen to significantly increase their financial situation. Are they all resigned to never being happy?

That website has many other interesting results.

WaPo: What Scientists Know About Aliens.

November 26, 2023 / Richard Nestoff / 0 Comments

WaPo: What We Know About Aliens

It came from space, hurtling at tremendous speed: a mystery object, reddish, rocky, shaped like a cigar. Its velocity was so extreme it had to have come from somewhere far away, in the interstellar realm. The astronomers in Hawaii who spotted it in 2017 named it ‘Oumuamua, Hawaiian for “a messenger from afar arriving first.”

Don’t forget the unexplainable Wow! signal detected by Ohio State in 1977.

WSJ: Oregon Realizes that Decriminalizing Hard Drugs was a Mistake

November 12, 2023 / Richard Nestoff / 0 Comments

WSJ: Oregon Decriminalized Hard Drugs

EUGENE, Ore.—Soon after Oregon became the first state to decriminalize all drugs in 2020, Officer Jose Alvarez stopped arresting people for possession and began giving out tickets with the number for a rehab helpline.

People sprawled on sidewalks and using fentanyl with no fear of consequence have become a common sight in cities such as Eugene and Portland. Business owners and local leaders are upset, but so are liberal voters who hoped decriminalization would lead to more people getting help. In reality, few drug users are taking advantage of new state-funded rehabilitation programs.

Anybody could have seen this coming, but somehow, they still think they are smarter than the rest of us. In Econ 100, you learn that people respond to incentives. Remove disincentives to take hard drugs, and more people take hard drugs.

WSJ: When to Retire

November 8, 2023 / Richard Nestoff / 0 Comments

WSJ: How to Know When It’s Time to Retire

Her finances were in order, and with friends passing away—including one just into retirement—she decided it was time. Still, when her last Friday arrived in June, she sat in front of her computer well into the evening, trying to convince herself to log off.
“It just felt like a part of my life was being cut,” she said.

It’s the Wall Street Journal, so the article is written for dynamic and successful managers. For the people I know, the decision wasn’t difficult once retirement became an option.

For people who aren’t defined by their jobs, it’s the point where they can financially swing it.

For people who like their work, but are no longer challenged by it, the time to go is when a buy-out or other opportunity presents itself.

For people who enjoy their work, something changes that will be an uncomfortable challenge or threatens to make it not so fun.

The last one was my reason, but it happens often. I was assigned a new set of courses to teach. It would take a couple of years to dial in my presentation, so better to go now. For other people, the organization is being shuffled, so bow out in advance.

I don’t know anyone who was killing it at work, with their value linked so closely, that leaving the job was a huge step. If they have nothing else to fill their time, working might be the best option.

WSJ: Americans in a Rotten Mood.

November 3, 2023 / Richard Nestoff / 0 Comments

WSJ: The Economy is Great

So if the economy is so good, why are Americans so gloomy? Confidence readings are depressed. Some 69% of respondents to a Wall Street Journal survey in August said the country is headed in the wrong direction. President Biden’s approval ratings are mired around or below 40%, and approval for his handling of the economy is even lower.

When the government and media have been lying to us about everything else, why should we believe them about the economy?

WSJ: Buying a house could cost less.

November 2, 2023 / Richard Nestoff / 0 Comments

WSJ: Realty Commissions

In recent years, technology has made a host of consumer transactions cheaper—from booking a vacation to buying stocks—but commission rates for selling a home haven’t really budged. That could soon change.

When I started working for real in the 1980’s, brokerage houses charged a minimum fee of $35 to buy or sell stocks. For small purchases, that was a big commission. Now, it’s virtually free to buy or sell. That opened the stock market to almost anyone.

Since dad worked for American Airlines, we didn’t book flights, but flew stand-by. That was ludicrously cheap. As I recall, we only paid the excise tax. A flight to LAX might be $8. For business trips at Caterpillar, we had an in-house American Express travel agent. She was a dirty bird, but that’s not relevant. Travel was handled by travel agents who received incentives from airlines, hotels and other rental car companies. People could book travel directly, but they paid full fare. Some travel agents remain, but they exist for their expertise in destination travel.

Home buyers rarely pay their agents. Instead, sellers pay their own agents, who in turn share their commissions with the buyer’s representative. In the typical transaction, total agent commissions are 5% to 6% of the sale price. For a $400,000 home purchase, that is roughly $20,000, split two ways.

For decades, it wasn’t clear what value realtors added to earn their 7% commission on the first $100k. Both homes I’ve purchased were through realtors because I didn’t pay the commission. Twenty years ago, I sold my home myself to save the commission. It wasn’t difficult, and paying the commission would have eaten up any appreciation of the property.

The plaintiffs in the class actions, who are home sellers in different regions of the country, say the longstanding industry rules amount to a conspiracy to keep costs high in violation of U.S. antitrust law. Buyers, they say, have little incentive to negotiate with their agents because they don’t pay them directly, while sellers are loath to experiment with a lower commission rate for fear that agents will steer clients away from their home.

When selling a home, it makes more sense to pay someone to help stage the house, a small amount to add the home to the MLS, an hourly rate to show the home and if necessary, a commission to negotiate the deal.

When buying a home, it doesn’t make sense to have both agents paid by the seller. Both agents only want to close the deal, with little regard for the interests of the buyer or seller. Getting any deal is better for them than getting the best deal. As a buyer, I don’t need a realtor for anything. I can search the MLS, look at houses and negotiate my own deal. Buyers that want an agent for some aspects of the process can pay for the services that are needed.

The realty market has been a protection racket for a long time. It will confuse some people to see it change, but that is long overdue.

Don’t leave your leaves.

October 15, 2023 / Richard Nestoff / 0 Comments

Washington Post: Leave leaves

This article leans to heavy on the word “experts”, but people who read a column called “Climate Solutions” probably still work for the greater good as defined by experts.

To best support wildlife and soil health, experts say leaves should be left where they fall.

The soil may be healthy, but it won’t support grass growth. Leaves block sunlight and acidify the soil. Your lawn will resemble a forest floor, with no grass, mostly dirt with sparse vegetation.

“The fallen leaf layer is actually really important wildlife habitat,” said David Mizejewski, a naturalist with the National Wildlife Federation, a nonprofit conservation organization. “All sorts of creatures rely on that for their survival as a place where they can find food and cover, and in many cases even complete their life cycle.”

Who wants a wildlife habitat for a lawn? Squirrels in the trees are great, chipmunks are okay, but they seem to be up to something. Mice and voles are vermin who can live in the wood with the raccoons, coyotes, opossums and the rest of the wildlife menagerie.

Bagging up your leaves and sending them to a landfill “is by far the worst thing” to do, Mizejewski said. In 2018, landfills received about 10.5 million tons of yard trimmings, which includes leaves, or just over 7 percent of all waste thrown away, according to the Environmental Protection Agency.

This does make sense. It always seemed unreasonable to put organic waste like leaves and grass clippings in plastic bags to be buried in a landfill.

While a light scattering of leaves on a lawn could also be beneficial to your grass, too thick of a layer could smother the turf, experts said. Mizejewski added that the fallen foliage might also harbor pests, such as ticks, so it’s important to follow best practices to protect yourself.

Still, he and other experts said removing all the leaves isn’t the answer.

“You don’t have to keep them on your lawn where they fall, but what we want you to do is keep them on property,” he said. “Don’t get rid of them.”

Ticks are a big problem here because there is so much forest.

Any lot size above a half-acre or so, has room for a mulch box. Grass clippings and leaves will break down by next year. Bagging yard waste makes no sense. It doesn’t make much sense for the city to send a truck around to vacuum up leaves in the Fall.

Don’t give away your carbon. I mulch my grass and the errant leaves early in the season. When the trees start dropping in earnest, I blow the leaves into the woods. The ticks and voles can go nuts as long as they stay over there.

WSJ: Everything is broken, but it might get better.

September 29, 2023 / Richard Nestoff / 0 Comments

WSJ: Moral order is Crumbling

One would have to be incredibly naive or distracted to think that society is functioning properly. Very little of the federal government is operating in the best interests of the American people. On the local level, several cities have stopped enforcing laws and have gone quite feral.

Over the past 30 years, the values of Judeo-Christian belief that had inspired and sustained Western civilization and culture for centuries have been steadily replaced in a moral, cultural and political revolution of the postmodern ascendancy. But the contradictions and implausibilities inherent in this successor creed have been increasingly exposed, and its failure to supply the needs of the people is discrediting it in the popular mind.

WSJ: Electric vehicles aren’t working out like they’d hoped.

August 22, 2023 / Richard Nestoff / 0 Comments

The Electric-Vehicle Bubble Starts to Deflate

It’s ironic, to say the least, that the U.S. is seeking to imitate China’s economic model at the moment that its industrial policy fractures. Look no further than its collapsing electric-vehicle bubble, which is a lesson in how industries built by government often also fail because of government.

It’s always a bad idea when the government tries to nudge us into something. If EV’s are a great idea, the market will recognize that without the need for carrots and sticks. After all of the lying and bullying with regard to Covid, we don’t believe what the government tells us. Their motives are suspect and their thinking is muddled.

Ford recently reduced its EV production targets as its losses and unsold inventory grow. At the end of June, it had 116 days of unsold Mustang Mach-Es, and GM’s electric Hummer had more than 100 days of supply. And this is in a growing economy.

Electric vehicles have a limited range, recharging takes hours and they catch on fire. Some consumers may overlook these features, and they are welcome to buy one.

From a policy perspective, we don’t have a bunch of nuclear power plants generating cheap and abundant energy. Pushing to electric makes no sense until we’ve got the nukes.

Our grid is not robust. My power went out for three hours yesterday while the weather was sunny and mild. Fix the grid.

Toyota, my choice in vehicle manufacturers, doesn’t go in for fads so my next vehicle will be another conventional Tacoma.

With all of the technological innovations we have, more of us should be richer and more comfortable. Governmental interference is pissing away the future we should be enjoying.