Archive for June, 2009
In Defense of Renting
It’s no secret that Americans love to buy things. Throw a dart at any newspaper from the past 12 months and you’re liable to hit an article about consumer spending, automobiles, or housing. Each of these themes is directly related to buying new stuff. New houses, new cars, new gizmos, new gadgets. The thinking, it seems, is that the key to ending the recession is buying more.
Dare I suggest we consider an alternative? There’s so much emphasis on buying that I need to give voice to the alternative: renting.
To illustrate, let’s walk through each example above.
Housing – It’s long been cited as the American Dream : owning your own home. But if you dig a little deeper, the reality isn’t quite such a happy dream. In the post-war period, almost all home purchases are done using a home mortgage. Down payments generally make up 20% of the purchase, with the remaining 80% financed by the bank and repaid over 30 years (with interest, of course). Do you really “own your own home” if you hold a mortgage? An easy test: stop paying your mortgage for a few months and you will soon find out who really owns your home!
In what could best be described as a good idea long past its welcome, home ownership is heavily subsidized by the federal government in the form of tax credits. All the interest payments for a home mortage are deducted from taxable income. Over a 30 year, $250,000 mortgage, interest payments could total $280,000. Assuming a 30% tax rate, your fellow taxpayers just handed you a check for $84,000. (Now we know where to find the true welfare queens.) Factor in the number of outstanding mortgages in the U.S. and you can start to see we’re talking about real money!
To make matters worse, the brave legislators in Washington have reacted to the downturn in the housing market by throwing even more money into that financial black hole. They’re currently offering an additional $8,000 subsidy for first-time home buyers and are discussing expanding that to $15,000 for anybody. Madness!
What’s wrong with renting? I’m all for it! I would rather not add a massive mortgage debt to my personal balance sheet. Rental properties come in all flavors, from apartments to condos to houses. No one has to know that you pay a landlord instead of a bank each month. And it sure is comforting to know that when the water heat breaks or the roof springs a leak it’s the landlord and not you who’s responsible for repairs.
My critics will counter that “if you’re paying rent you’re just throwing your money away”. When compared to the costs of owning a home, renting is often favorable from a financial perspective. Only a small portion of your mortgage payment actually goes towards building equity. The rest is taken out as interest, taxes, and fees. Even the home equity is a mediocre investment at best–a house never earns money (like the stock of a company) nor is the capital invested (like a bond). Homes are also incredibly illiquid investments, requiring many months (and many more fees) to sell. In short, it’s not the slam dunk investment that charletan real estate agents would want you to believe.
[To be continued]
Filed under culture, economics, frugal : Comments (6) : Jun 26th, 2009
The Gay Marriage [non-] Debate
My good friend Mike tipped me off to a very well written and well thought-out critique of the standard opposition to gay marriage. The New Republic stands out as a lasting example of genuine thought against the backdrop of media noise.
First, let me give a quick recap of the official Tadfad policy on gay marriage: I agree with social conservatives that the “tradition of marriage” belongs to the Church (whatever church that may be). Furthermore, as a strong proponent of keeping a healthy distance between Church and State, the State shall not step on the Church’s toes in defining “marriage”.
These two principles are simple enough and lead me to the conclusion: Church gets to define marriage however it so chooses (one man & one woman; one man & another man; one woman & one toaster) while State defines “civil unions” as the legal contract between two consenting adults without any discrimination for gender, age, race, or sexual orientation. The civil union contract grants all those great rights and responsibilities we’ve all grown accustomed to. The marriage certificate holds sentimental weight only (since it’s defined by Church and not State). Marriage becomes no different than baptism, bar mitzvah, or first communion–important to the Church; irrelevant to the State.
This position is not widely held (Ron Paul is a noteable exception) and rarely makes it into the public debate. Given these constraints, I am forced to make a concession: since heterosexuals are generally unwilling trade their State-issued marriage licenses for a State-issued civil union license, the civil libertarian in me must therefore demand that we extend the eligibility of State-issued marriage licenses to all consenting adults. Doing otherwise is discrimination laid bare.
With that, here is the article from The New Republic:
This is the One Percent Doctrine of social policy. If you place zero weight upon the preferences of gays, then all you have to do is suggest a possible harm, however remote, associated with gay marriage. The same sensibility was on stark display in a recent National Review editorial. Dismissing the argument that marriage might foster more stable gay relationships, the magazine’s editors replied curtly, “[T]hese do not strike us as important governmental goals.” There’s a word for social policy that disregards the welfare of one class of citizens: discrimination.
Some hard-core conservatives are willing to openly discriminate like this, but most people aren’t, which is why public opinion is warming to gay marriage. Most opposition arises from simple discomfort. When I first started hearing about gay marriage, I didn’t oppose it, but it seemed sort of strange and radical–and only after several years did I realize I supported it.
Go there. Read it. Thanks.
Filed under culture, politics : Comments (2) : Jun 23rd, 2009
Compact Camera Roundup
Special guest post by Mr. Dan Larson
My pocket camera just died. After setting my budget at $250 and doing much research, here’s a list of cameras that made my short list.
Top Pick: Fujifilm Finepix F100fd
This thing is a technical marvel at an outstanding price. I know it isn’t a Canon or a Nikon, but I don’t care. The specs are awesome (5fps continuous mode, high dynamic range, etc…) and the form is good. This seems to be the professional photographer’s choice for pocket cameras and it scores very highly in dpreview.com’s tests. The only drawback I can see is that it doesn’t do HD video.
Runner Up: Sony Cyber-shot DSC-W290
I’ve always been impressed with Sony’s ability to produce nice looking images right out-of-the-box. If you don’t mind their stupid memory sticks and a few other drawbacks (like lots of artifacting in low light), then this is a great every-day use camera. I would have recommended the Sony W300, but it is getting harder and harder to find. That pocket camera had full manual control and would have been a dream, but the 290 is a suitable replacement (especially if you want 720p video).
The Best Of The Rest:
Canon PowerShot SD880IS
Filed under technology : Comments (0) : Jun 15th, 2009
Bike to Work Week 2009
Summer has more or less come to Milwaukee so it’s time to get back on the saddle : Bike to Work Week 2009 is here!
We had nice weather on all but 1 day this week, and I’m on track to ride to work 3 of 5 days. I find that I consistently overestimate the “hassle factor” of biking to work and I underestimate how great I feel after 30 minutes of moderately vigorous exercise in the morning.
Since the 2008 season, I’ve made some observations and modifications to my bicycling routine that helped a lot:
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Dress the part – Bicycle shorts look silly but they really do help. Add a bicycling jersey or other top and you’ll notice the difference.
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Get a rack – A rear rack and pair of panniers (or saddlebags) can comfortably carry a lot of gear. I used to use my Timbuk2 messenger bag and found that the strap would get uncomfortable. With the panniers, I have full range of motion and can carry my work clothes, computer/supplies, and a lunchbox.
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Plan for flats – Ride long enough and you will get a flat. A spare tube, tire levers, and CO2 canister are very easy to pack in a small kit and will get you back on the road in no time.
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Winter training helps – After blowing out my knees from marathon training, I switched to stationary bike for the winter. Remarkably, the work I put in during the off season translated to much faster/easier cycling on the real bike.
To keep myself honest, I’m tracking my commute for the rest of the year based on transportation mode. (Using my new favorite data collection + display tool DAYTUM):
Filed under Milwaukee, energy, work : Comments (1) : Jun 11th, 2009
The New Socialism (WIRED Magazine)
Don’t be frightened by the title. This article is actually a pretty good review of how social media is redefining many of the concepts we learned to abhor from previous incarnations of socialism.
This is why I love WIRED magazine. They’re willing to write about ideas and concepts before they’re fully formed and ready for mainstream consumption. Best $12 I spend each year.
Filed under culture, economics, work : Comments (0) : Jun 4th, 2009
