A Welcome Break from Stupidity

These folks just plain get it.

Stupidity factor: 0/10

So You Want to be a Masonomist

By Arnold Kling : 17 Oct 2007

"Imagine there's no countries. It isn't hard to do" John Lennon

In 1962, few people knew that the future of popular music was to be found in Liverpool, England and Hamburg, Germany. In the early 1970's, few people knew that the future of information processing was to be found at the Homebrew Computer Club. In 1993, few people knew that the future of online software was in Champaign-Urbana, Illinois. Years from now, perhaps people will be saying that something big got started recently at the George Mason University department of economics. Maybe if you become a Masonomist now, you will be getting in early on a trend that will soon catch on much more widely .. (Note: my formal link with GMU is rather tenuous--I teach one course as an adjunct. Informally, my links through blogging are stronger.)

The excitement at Mason is in blogs and books. The three most well-known blogs are Marginal Revolution (Tyler Cowen and Alex Tabarrok), Econlib (Bryan Caplan and myself), and Cafe Hayek (Russ Roberts and Don Boudreaux). Robin Hanson (Overcoming Bias) is one of many other Mason faculty and graduate students who blog. This year, both Caplan and Cowen produced influential books, Myth of the Rational Voter and Discover Your Inner Economist, respectively. Why do Masonomists blog so avidly? I think it is because there is a sense that we are onto something, and we want to ramp up the conversation among ourselves as well as communicate with a wider audience.
Lose the we
Most economists favor the free market, with reservations. Masonomics rejects the reservations. If John and Mary are free individuals, and John trades with Mary, then John and Mary both are better off. End of story. Most other economists believe in the need for government intervention. Like many non-economists, they talk about government policy in terms of we. We must, we have to, we need, we should, etc. Once upon a time, "We, the people" was the preamble to a charter that reminded those in government of the limitations on the power granted to them. In today's political discourse, "we" is more often the preamble to something like a call for an involuntary collective health system.

If you want to be a Masonomist, you have to lose the we. When people use we in today's politics , they are doing two things.
1. Appealing to a moral entity that stands apart from and above John, Mary, or any other individual
2. Treating government as the embodiment of that higher moral entity

You can be a Masonomist and believe (1). It is a good thing to have a conscience and moral standards. It is a good thing to engage in volunteer work, to form organizations that address the needs of others, and to act unselfishly toward family and others in your community.
Masonomists encourage our noble impulses. Tyler Cowen's book is a cross between a self-help manual and an essay on moral philosophy. In one section, he suggests ways that one can modify one's behavior in order to give enough to charity and to ensure that one's charitable contributions are made wisely.

However, Masonomics is unrelenting in its rejection of (2). For many years, George Mason has been the home of Public Choice Theory, which says that instead of imagining what a wise, omniscient, benevolent government might do, one should pay attention to how government operates in practice. Nobel Laureate James Buchanan, founder (with Gordon Tullock) of Public Choice, is the gray eminence of Masonomics. In practice, the impetus for stopping John and Mary from trading typically comes not from a higher moral entity, but from Mary's competitor Sam. For example, Boudreaux has studied the history of anti-trust. In theory, anti-trust laws are designed to protect consumers from high-priced monopoly. In practice, anti-trust laws are used by competitors to punish low-price competition. For example, when Microsoft was hit with anti-trust action, the "crime" was giving away a web browser for free! You can learn more by listening to this conversation between Boudreaux and Roberts.

Melinda Gates, Lose the We
I should emphasize that "lose the we" does not mean that one should be selfish or uncompassionate or uncaring. Instead, it means that you should channel your impulse to do good by actually doing good. Saying we and advocating government policy is instead a way of feeling good. It is an arrogant, demagogic pose.

If you believe so strongly in we, why don't you put your money where you mouth is? Why don't you donate money to the government? I know my answer to that question. I try to choose charities that have low overhead and programs that seem to me to be working. I think that donating to private charitable organizations is more worthwhile than donating to government. If you, too, make no donations to government, then your actions say "lose the we." If your words say otherwise, then perhaps you should rethink your words. For example, Melinda Gates recently wrote,
We believe that Americans have the power to improve millions of children's lives by telling their political leaders -- in the 2008 presidential campaign and beyond -- that high schools matter and by demanding to know more about their plans for fixing them. ...If Americans can speak with one voice, then the next president and other elected leaders will feel compelled to offer visions and plans that will help ensure that every child in America attends a great high school.
Melinda Gates, lose the we. The visions and plans of our elected leaders are part of the problem in education, not the solution.

Back in the 1980's, I recall that Microsoft had a very low profile in Washington. Technology leaders, including Bill Gates, seemed to feel this way: those who can, compete; those who can't, lobby. In this view, a technology firm that has a big lobbying focus is indicating that it has lost its way. If the Gates Foundation cannot come up with a better way to spend its money than to plead with politicians, then I would suggest that it has lost its way.

Masonomist Trade Doctrine
Dani Rodrik, an economist at Harvard, where we gets used without a second thought, thinks that Masonomics overstates the case for free trade. He argues that we cannot prove that everyone in a country benefits from free trade. This is true. In fact, it is theoretically possible for more people to be hurt by trade than benefit from it. Therefore, Rodrik implies, it is conceivable that we should have tariffs, or, at the very least, we need to compensate those who are "hurt" by free trade.

Masonomics says to lose the we. Instead, like John Lennon, let us imagine that there are no countries. John and Mary are trading, and they are both better off, but an economist calculates that Sam would be better off if John and Mary were prevented from trading. What entity has the moral authority to stop John and Mary from trading?
Governments lay claim to legal authority to collect taxes or impose restrictions on trade across borders. But there is no moral significance to a border. If John, Mary, and Sam all lived within the same country, the question of whether free trade is good for "us" would never arise. John's right to trade with Mary without interference on behalf of Sam would not be questioned. It is hard to see how moving Mary across a border changes the situation from a moral or economic standpoint.

Boudreaux will tell you that one of the most widely-quoted economic statistics, the national trade deficit, has no meaning. There is no we that is in debt to a they. There are only individuals who have issued securities to individuals. It is true that governments issue securities also, and government deficits are truly something that we will have to repay. Some of those government securities are held by foreigners. There is certainly something meaningful about the total liabilities of government, and there may be something particularly meaningful about the liabilities of our government that are held by citizens of other countries or by foreign governments. But that is not what is measured by the national trade deficit. We do not measure the balance of trade between Maryland and Virginia, and no one is the worse for this ignorance. Similarly, if we stopped measuring the balance of trade between the U.S. and China, no knowledge would be lost. Indeed, our overall economic literacy would increase, because there would be fewer misleading stories written about trade deficits.

The Cure for Market Failure
At the University of Chicago, economists lean to the right of the economics profession. They are known for saying, in effect, "Markets work well. Use the market." At MIT and other bastions of mainstream economics, most economists are to the left of center but to the right of the academic community as a whole. These economists are known for saying, in effect, "Markets fail. Use government." Masonomics says, "Markets fail. Use markets."

Somewhere along the way, mainstream economics became hung up on the concept of a perfect market and an optimal allocation of resources. The conditions necessary for a perfect market are absurdly demanding. Everything in the economy must be transparent. Managers must have perfect information about worker productivity and consumers must have perfect information about product quality. There can be nothing that gives an advantage to a firm with a large market share. There cannot be any benefits or costs of any market activity that spill over beyond that market.

The argument between Chicago and MIT seems to be over whether perfect markets are a "good approximation" or a "bad approximation" to reality. Masonomics goes along with the MIT view that perfect markets are a bad approximation to reality. But we do not look to government as a "solution" to imperfect markets. Masonomics sees market failure as a motivation for entrepreneurship. As an example of market failure, let us use a classic case described by a Nobel Laureate, which is that the seller of a used car knows more about the condition of the car than the buyer. Masonomics predicts that entrepreneurs will try to address this problem. In fact, there are a number of entrepreneurial solutions. Buyers can obtain vehicle history reports. Sellers can offer warranties. Firms such as Carmax undertake professional inspections and stake their reputation on the quality of the cars that they sell.

Masonomics worries much more about government failure than market failure. Governments do not face competitive pressure. They are immune from the "creative destruction" of entrepreneurial innovation. In the market, ineffective firms go out of business. In government, ineffective programs develop powerful constituent groups with a stake in their perpetuation.

Unpopular Opinion
Masonomics disdains the obscure mathematics of mainstream economics. There is nothing about Masonomics that is beyond the comprehension of an intelligent layman. Although Masonomics has no pretensions to be over the average person's head, Masonomists are reluctant to concede anything to popular opinion. For example, Bryan Caplan's book describes the economically ignorant voting public as a menace. As consumers, ordinary people have sufficient incentive to learn what is best for them. As voters, they do not.

When it comes to matters of fact and analysis, Masonomics does not care how many people feel a certain way, or how strongly they feel it. Robin Hanson exemplifies this unforgiving intellectual outlook. For example, he recently wrote:
our main problem in health policy is a huge overemphasis on medicine. The U.S. spends one sixth of national income on medicine, more than on all manufacturing. But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status. Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. To their shame, health experts have not said this loudly and clearly enough.

Many health policy wonks are aware of the large number of studies that show little relationship between the amount of medical services a population receives and the health of that population. However, hardly anyone is willing to follow this result to its logical conclusion, namely, that we probably would be better off with less medical care. Hanson understandably regards this as a remarkable blind spot among health policy advocates.

One of the variables that is correlated with health status is Unmentionable. This Unmentionable Factor affects life expectancy, income, international differences in the standard of living, and many other phenomena. Garett Jones is a young economist who incorporates The Unmentionable into his research. I describe a recent paper of Jones as saying that "people with high levels of The Unmentionable are better able to co-operate with one another." Not surprisingly, Jones has just joined the faculty at George Mason.

Are You Ready?
So, if you are ready to get in on the next Big Thing in political economy, now you know what to do:
--lose the we
--recognize that market failures exist, and that is why we need markets
--arrive at truth by following the facts, not the fashions
When Masonomics itself becomes fashionable, it will be time to look for something else.

Stupidity in Hindsight, This Is!

A not-so-fond look back at the days when Yoda ran the Fed and an attack on the great Ayn Rand. Stupidity Factor: 7.5/10

Greenspan's '63 Essay Foretold Subprime Inaction
Commentary by Jonathan Weil

Dec. 19 (Bloomberg) -- Why did Alan Greenspan fail to act while the roots of the subprime-mortgage crisis spread? Here's one possible explanation: The Ayn Rand disciple held fast to his unwavering laissez-faire beliefs. Another way to look at this would be that Greenspan figured poor people with less than stellar credit should be given a shot at home ownership.
Yesterday's New York Times carried a front-page article chronicling the many warnings the former Federal Reserve chairman received about aggressive subprime lenders luring unsuspecting customers into crazy mortgages they never could afford. What kind of imbecile applies for a mortgage and is then surprised by their first payment? Or their second? Or the one hundredth? Apparently the answer is about 10% of subprime borrowers? If you can’t pay for it…don’t buy the house. It’s not Greenspan's job or the banks to make sure you aren’t an idiot. ``Where was Washington?'' the newspaper asked. And where was Alan? Where was personal responsibility?
There was Edward Gramlich, the late Fed governor, who urged Greenspan in 2000 to have Fed examiners investigate the industry. Greenspan said no. Activists from a California housing group, the Greenlining Institute, met with Greenspan in 2004, urging him to press lenders for a voluntary code of conduct. How does one “press” that which is voluntary? Greenspan wasn't interested and didn't give a reason. He offered a weak defense: The Fed wasn't equipped to investigate and wasn't to blame for the housing bubble and bust.

Greenspan's recent memoir, ``The Age of Turbulence,'' offers no satisfactory answers either. Greenspan said he knew ``the loosening of mortgage credit terms for subprime borrowers increased financial risk.'' Yet he ``believed then, as now, that the benefits of broadened home ownership are worth the risk.'' Didn’t I just say that? Giving people who are riskier bets the chance to own a home is still a good thing. Of course, thanks to knee jerk, drive by columnists like our friend Jonathan, that opportunity went bye-bye around the first week of August. Poor people will be crashing on your sofa soon John. Hope you stocked up at Costco this week.
No, I believe the best answer can be found in an August 1963 article called ``The Assault on Integrity'' that Greenspan, then 37, wrote for Rand's monthly journal, ``The Objectivist.'' Judging by how he rebuffed Gramlich and others, it looks like he followed his old instincts as the subprime mess festered.

Agent of Consumers

``Protection of the consumer against `dishonest and unscrupulous business practices' has become a cardinal ingredient of welfare statism,'' Greenspan began his essay, which Rand included in her 1967 book, ``Capitalism: The Unknown Ideal.''
``Left to their own devices, it is alleged, businessmen would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings. Thus, it is argued, the Pure Food and Drug Administration, the Securities and Exchange Commission, and the numerous building regulatory agencies are indispensible if the consumer is to be protected from the `greed' of the businessman.
``But it is precisely the `greed' of the businessman or, more appropriately, his profit-seeking, which is the unexcelled protector of the consumer.
``What collectivists refuse to recognize is that it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.''
``Reputation, in an unregulated economy,'' Greenspan said, ``is thus a major competitive tool.''
Do Nothing
This view of the world might well explain why Greenspan did nothing. Yet if he'd said these words anytime in the past 20 years, they would have rung false to many people familiar with the 1980s savings-and-loan crisis, the corporate scandals touched off by Enron Corp., or the housing bust. Well, actually, Enron was unscrupulous and went out of business, proving Greenspan, Rand and every other person with a brain right in thinking that less regulation=good.
``He still believes philosophically what he wrote 30, 40 years ago,'' says Greenspan biographer Jerome Tuccille, author of the 2002 book ``Alan Shrugged.'' ``But he must know we don't have a truly competitive free-market economy, and that's the context he was writing about. He must know the propensity of corporations to put greed ahead of their reputations.'' Do you think we might be confusing profit for greed? Of course corporations work for profit, which is why they aren’t non-profits. The point is you can only push so far against what consumers think is right before they will stop buying your stuff. I’ll let you review my dealing with AT&Ts customer service department if you still question this.
Greenspan wrote: ``It requires years of consistently excellent performance to acquire a reputation and to establish it as a financial asset. Thereafter, a still greater effort is required to maintain it: a company cannot afford to risk its years of investment by letting down its standards of quality for one moment or for one inferior product; nor would it be tempted by any potential `quick killing.'

Opposite Result

``Newcomers entering the field cannot compete immediately with the established, reputable companies, and have to spend years working on a more modest scale in order to earn an equal reputation. Thus the incentive to scrupulous performance operates on all levels of a given field of production. It is a built-in safeguard of a free enterprise system and the only real protection of consumers against business dishonesty.''
Government regulation, he went on, ``is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole `contribution' is to substitute force and fear for incentive as the `protector' of the consumer.'' Well, it also adds another layer of costs and keeps trial lawyers busy, but I digress. Minimum standards, he said, gradually become the maximums, and regulation undermines the moral base of business dealings.
``It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him.

Don't Stop Believin'

Journey reference aside, Jonathan, should we instead embrace the beliefs of the collectivists who flourish around the world in….in…Cuba? If anyone needs to abandon their way of thinking it is the people whose social experiments have failed time after time.
``Protection of the consumer by regulation is thus illusory,'' he said. ``Rather than isolating the consumer from the dishonest businessman, it is gradually destroying the only reliable protection the consumer has: competition for reputation.
``While the consumer is thus endangered, the major victim of `protective' regulation is the producer: the businessman.''
The largely unregulated subprime-lending industry, of course, didn't turn out this way. Countless mortgage brokers and lenders didn't care about their reputations. And now they have no companies and no jobs. Gosh it’s almost as if capitalism works. Oh, wait, it does! Wall Street banks, which packaged and pitched the loans as AAA securities, didn't care about theirs either. There were quick killings to be had. And money to be lost. Apparently there was a cost to taking on risky loans. Bet no one does that for a while. Once again, yay capitalism.
Four decades later, Greenspan's argument seems almost childlike in its idealism. Actually it is the consistent belief that government creates safety that is child like. Believing that government can step in and make things better by force of will is so naïve in the face of all the data of everyday life that all I can say is Jon Jon, time to grow up. Yet, judging by his inaction, it looks like he never stopped believing.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.) And they are stupid.
To contact the writer of this column: Jonathan Weil in Boulder, Colorado, at jweil6@bloomberg.net

I'll Be Stupid for Christmas

This piece of garbage comes from the king of financial media, the Wall Street Journal. If you want to shell out for the subscription you can see the article here: http://online.wsj.com/article/SB119603767388403471.html

I'd like to save you the trouble.

Stupid Factor: 7/10.

Home or the Holidays? How clever and subversive...Anne must be auditioning for a 60 Minutes gig.

Mortgage Woes Are Creating A Subprime Christmas For Consumers and Stores

By ANN ZIMMERMAN

November 26, 2007;

Page B1

Susan and John Harriman normally spend about $500 on holiday gifts -- $100 on presents for each other, $50 on their 29-year-old niece, then $25 on all of their other family members. But this season, the couple has a wrenching choice to make: celebrate Christmas or keep their home out of foreclosure. "Celebrating" Christmas doesn't have to mean spending more money than you have."We're just sending out Christmas cards, with us standing in front of the house -- the house that cost us," says Ms. Harriman. If you are so poor, why spend that much? Stamps cost money too!

With all their might, the couple is trying to hold on to their modest 1,100-square-foot ranch house in Central Islip, N.Y. In the six and half years since they bought their home on Long Island, Susan, a former postal worker, and John, a school district custodian, have watched their monthly mortgage payments skyrocket 66% to $2,454 due to home-equity loans for repairs, delinquent fees, and an adjustable-rate mortgage that has risen twice in the past six months. Sounds like pretty poor planning…perhaps a budget would have helped? Or maybe a quick viewing of Tom Hanks in The Money Pit?"I think people pay less a month on mansions in the Hamptons than we do," Ms. Harriman says with a bitter laugh. Yes, and they are living within their means. How strange.

Housing-related woes may turn out to be this year's Grinch, not just for families like the Harrimans who are fighting off foreclosure, but for many other consumers accustomed to funding life's little extras -- from big-screen TVs to a Caribbean vacation -- by borrowing against their home's value. And I've been funding that stuff with cash all these years, how antiquated. Now, with mortgage delinquencies at record highs and mortgage-equity withdrawals well off the peak hit in the second half of 2006, the housing mess has begun to exact collateral damage on the larger consumer economy, beyond the furniture and home-improvement retailers that began to be squeezed a year ago. It is one of the main reasons that holiday sales are expected to be the weakest since the recession in the early part of the decade. Yet, they were up 8.3% over last years Black Friday and rose about 3.5%-4% over last years total. Some collateral damage. "Housing tentacles run deep into the consumer economy and threaten to choke it," says Mark Zandi, chief economist at Moody's Economy.com. Beyond the direct effect on the economy from home sales, which result in people spending to fix up and furnish their homes, almost 10% of all jobs are in housing-related businesses, from real-estate agents and mortgage brokers to landscapers and roofers. That means, let me check my math…90% of all jobs have absolutely nothing to do with housing. Gosh, how will the largest economy in the world cope with such insignificance?"Every dollar change in housing wealth results in a change of five cents in consumer spending. And that adds up to hundreds of millions," Mr. Zandi says . This is correct, changes in $1 of wealth result in .05 cent changes in spending. But changes in income result in .70 cent changes per dollar increase. Hourly wages have risen 3.8% over last year. Anybody still awake out there?

During the giddy days of the housing run-up, convinced their home's value would keep rising, many families dug further into debt by "withdrawing" equity to raise cash for other purchases. Well, that was dumb.

In addition to the common second mortgage, or home-equity loan, a popular method was to refinance with a larger mortgage reflecting a home's greater market value. Borrowers then paid off their original, smaller mortgage and pocketed the remaining cash -- called "cash-out refinancing." While interest on the new loan was usually less, monthly payments increased.Mr. Zandi estimates the withdrawals hit their peak in the second half of 2006 and totaled $850 billion, or 10% of disposable income. By the third quarter of this year that amount had fallen to $550 billion."With home values falling fast, it is more difficult to cash out, which is particularly hard on lower and middle income households," says Mr. Zandi. "One-third of households pulled equity from their homes the last several years. Those homeowners that have cashed out have a collective saving rate of negative 10%."With the knowledge that just one missed payment will start the foreclosure process, Ms. Harriman has to be scrupulously thrifty about her holiday spending. Except for the cards, the lights, the blow up ornament on the lawn and the gifts. Other than that, nothing. The Harrimans' attorney told them that if they make a year's worth of mortgage payments on time, they might be able to refinance at a fixed rate of 8%, down from 10.5% now. They have about six months to go. If your credit didn't suck you could probably get that at about 6% fixed right now. Ooops.

Ms. Harriman -- who revels in decorating for the holidays -- has three inflatable lawn ornaments, but will put up only one this year -- a Charlie Brown Christmas globe -- to save on the electric bill. This is being thrifty?? How about selling the globes on EBay and stop whining!For the same reason, she won't string multicolored lights on the outside of her house, nor put up the tiny white lights along the interior hallways. In their place, she will plant some cardboard candy canes along the front walk. To save money on the Christmas dinner, she'll serve turkey or lasagna, but not both."Everything is being halved," she says.The Harrimans are following the advice of the Community Development Corporation of Long Island. A nonprofit organization that, among other things, promotes homeownership, the CDC's caseload has mushroomed in recent months as problems with subprime mortgages -- loans extended to the riskiest borrowers -- have worsened.Its work is particularly anguishing around the holidays when clients are tempted to overspend."Everyone who comes here has to make tough choices and some of them can keep their houses by budgeting to the bare minimum," says Eileen Anderson, senior vice president of the CDC. I don't know about you, but I make the decision whether to spend every nickel I have on frivolities or not just about every day. Thankfully, I'm not stupid and I get that one right most days.

Ms. Anderson says it seems like the choices are increasingly harder to make as stores work overtime to lure shoppers with earlier promotions and no interest payments."Encouraging people to charge now and pay later is the worst thing to do when you're struggling," she says.

With home equity in the doghouse, consumers are turning back to credit cards, cushioning some of the blow to consumer spending. Recent data from Equifax Inc. shows that the growth in the number of new credit cards, as well as balances, is as strong as it has been since 2001, after remaining fairly flat in recent years. But defaults also are creeping up.Retail experts have begun to see consumers curb spending by turning to lower-price stores and goods. That explains the projected softness in "affordable luxury" sales at companies such as Nordstrom Inc. and Coach Inc. "Nordstrom customers are trading down to Macy's, and the Macy's customer is trading down to Target," says Bill Dreher, retail analyst with Deutsche Bank.Trading down, themselves, the Harrimans are calling it their dollar-store Christmas. The couple are typically Wal-Mart shoppers, with an occasional splurge at Kohl's. But this year they will give each other small tokens from the local dollar store.This was not what they expected when they became homeowners in April 2001. They knew they were stretching when they bought their three-bedroom home -- "two bedrooms and one the size of a closet," Ms. Harriman says -- about eight months after they got married. But the couple, renting a room in a friend's house, were ready for their own place, and they figured it would cost just as much to rent an apartment. They figured wrong. Poor planning and poor budgeting?

The house they bought hadn't been updated since it was built almost 80 years ago; it needed a new roof, insulated windows, a new kitchen. Even the doors, which had rotted, needed replacing.But their financial crisis was triggered when Ms. Harriman, who is 40 years old, began missing work due to flare-ups of her multiple sclerosis. She finally quit work in 2005, believing her pension and federal disability payments would make up for the lost salary. But it took six months for the disability to kick in and pension paperwork dragged on for two years. Perhaps a part time job? The real probelm here is that we have two people employed by the government marrying each other. Shouldn't there be a law against such blatant deepening of the stupidity pool? They took out a new mortgage, replacing their former fixed-rate loan with a lower adjustable rate that reset higher after two years, giving them time to catch up, they hoped. But they still couldn't manage, and ended up filing for bankruptcy protection. How exactly were you going to catch up without working? In September, Ms. Harriman finally got her pension. John, 38, started working a second job three mornings a week as a stock clerk at A.C. Moore crafts store. But just as they felt they were catching up, their mortgage interest rate jumped to 8%. This month it rose by two and a half points -- an increase of $800 a month."My husband was real down that there will be nothing under the tree this year," Ms. Harriman says. But, "it makes me want to work harder to get back to live my life normally again. It is a reminder and an incentive."

Write to Ann Zimmerman at ann.zimmerman@wsj.com 1

In all this is a good example of the media trotting out some poor half wit to show us how rough things are out there. Word to the wise? Things are always rough out there when you do dumb things. -LostintheBlog

A Message

Alone (more or less) and adrift, I sail on a sea of idiocy. Battered by the waves of incompetence, seeking that far shore called sanity. Climb aboard, if you will, and join me in my journey.