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CAT | General

If you haven’t heard yet, Osama bin Laden was killed this past weekend (see WaPo, WSJ, NYT, CNN, NPR).  This is a positive development for the United States, and the world, in my judgment.  But right now, the real work has began: the political spin machines on both the right and left are working hard to spin this story the way they want it.  I’ll make predictions now (9:50 am eastern time on 5/2/2011, about 10 hours after bin Laden’s death was announced) about how the spin machine over the next week will treat this story.  I predict by 5:00 pm eastern time on 5/3/2011, we’ll see most of these spin stories emerge.

From the left:

  1. Death of Osama is the greatest thing since sliced bread.  Death of Osama cures cancer, stops climate change, makes everyone in the world love the United States.
  2. Death of Osama shows that President Obama is the greatest commander in chief ever; President Bush had absolutely no hand in killing Osama.
  3. When a commentator slips and accidentally says “Obama” instead of “Osama,” (I already heard someone slip on NPR this morning) he or she is labeled as a racist.

From the right:

  1. Congratulations to President George W. Bush / “our military” while deliberately avoiding mentioning President Obama’s name.
  2. The death of Osama could have occurred earlier, but President Obama waited until recently to improve his election prospects.
  3. “Killing Osama doesn’t matter.  Who cares?”  (if this happened while GWB were in office, the left would be saying this, obviously).  Or, alternatively, “why are we celebrating someone’s death?  How cruel are we!”

From Donald Trump:

  1. That wasn’t Osama.  Where is the birth certificate?

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Rant about the Birther Movement

The birther movement is insane.  There can be no reasonable person who believes Barack Obama was born outside of the United States after he produced a long-form birth certificate showing he was born in Hawaii.  It’s surprising anyone questioned it to begin with.  But according to a Wall Street Journal poll conducted today, 27.9% out of 10,354 people stated that the release of Obama’s birth certificate did not settle questions about his citizenship.  In other words, they think the certificate is a fake.  They think that the President of the United States of America forged a birth certificate.  Are you KIDDING me?  That sounds like something a 16-year-old kid would do on photoshop, not the most powerful person in the world.

And this poll was conducted on the Wall Street Journal’s website.  The Wall Street Journal is regarded as a very high-quality publication, and the people who read it are considered to be some of the smarter individuals who read newspapers.  I’m not saying it’s true, but I think we can all agree that regular readers of the WSJ are not dummies.  Yet around 28% of WSJ’s readers think this birther movement is legitimate.

Why?  Well in addition to the fact that most WSJ readers are relatively intelligent, the paper also tends to have a large conservative readership.  So my only thought is that these readers are so immersed in being conservative that they ignore facts and vote in the poll in whatever way suits their political interest.

Additionally, Donald Trump is essentially running on a platform of being a birther and nothing else.  But some polls have him LEADING THE 2012 REPUBLICAN NOMINATION RACE RIGHT NOW.  Really?  He’s running during a time of extreme fiscal crisis, yet has a record of personal and business BANKRUPTCY.  What good does he bring to the table?  Holy crap.

And of all the things to criticize someone about, focusing on the citizenship requirement for being a president has to be one of the pettiest.  Yes, it’s a constitutional requirement, and yes, you have to satisfy constitutional requirements to be President.  But do we gain much from prohibiting non-citizens from becoming president?  Many people who are born in the United States take this country for granted.  Many who immigrate to the United States do not, and love their country more than those who have lived here for their entire life.  Is there a valid policy reason for prohibiting non-citizens, perhaps those who love the United States more than anything else, from becoming president?  Do we really have some secret fantasy that “foreigners” will become president and destroy the US in favor of their former country?  Won’t people with evil intent or fake love for the country be rooted out in the extremely-invasive election process?

The same exact thing happens with people on the left attacking people on the right unfairly.  But the birther movement has to be the most crazy recent example.

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Buy Ethanol-Free Gas

Recently, I drove by a gas station in Montgomery, Alabama that had a large sign stating “No Ethanol in Our Gas!”  I had not seen a gas station advertising ethanol-free gasoline before.  Intrigued, I typed in “ethanol-free gasoline” on Google and found the website  At this website, you can find gas stations in your area (if you live in the United States or some parts of Canada) that offer ethanol-free gasoline.  You can also download POI and KML files that you can plug into your GPS device, smart phone, or Google Earth that will make it easier for you to find the gas stations. also has a handy map of the ethanol-free gas stations throughout the United States.  This map shows lots of ethanol-free gas stations in the Southeast.

Why might you want to purchase ethanol-free gas?  For one, ethanol reduces fuel economy by, at least according to the EPA, about 2-3% with a 10% ethanol blend (E10).  Many have criticized these studies as overly optimistic and that fuel economy actually falls by 2 to 7%.  Therefore, you will get more miles per gallon by purchasing ethanol-free gas.

Second, ethanol makes gasoline more corrosive, thus causing more harm to your engine over time than if you had just used gasoline.  In 2009, for example, Toyota had to recall 214,570 Lexus vehicles because of corrosion caused by ethanol.

Additionally—and this is really significant for individuals with older cars—E15 is coming.  The EPA recently decided that it is OK for gas stations to sell gasoline that is contaminated with up to 15% ethanol, which is 5% greater than the current rule of 10%.  While the EPA claims that a mixture of 15% ethanol in gasoline is “safe” for car engines, it recognizes that this is only the case for car engines made after 2001.  If you have a car made in the year 2000, the EPA admits that you shouldn’t be putting this stuff in your tank.  Additionally, even if you have a car that the EPA deems as able to deal with the more-corrosive 15% blend, do you really want to put something in your car that is more corrosive rather than less corrosive?

There are also many concerns about the damage E15 will do to non-car engines, such as lawn mowers and boats.

E15 will also of course reduce fuel economy even more than E10.  So when E15 is here, that is even more reason to find gas stations that sell ethanol-free gasoline.

Finally, buy buying ethanol-free gasoline, you avoid supporting the economic and environmental disaster that is the ethanol industry.  See this post for more details.

Ethanol-free gas might cost slightly more money at the pump (the ethanol-free gas station in Montgomery is about 10 cents per gallon more expensive than other gas stations).  But the reason isn’t because ethanol is cheaper to produce, rather, it’s because ethanol producers get a gigantic subsidy from the federal government.  In any event, the increased cost of ethanol-free fuel is offset, and perhaps subsumed by the benefits of avoiding ethanol, primarily better fuel economy and less damage to your engine.

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Credit Cards and Ethics

After writing that consumers shouldn’t use credit cards as a substitute for self control in my last post, I realized that there are legitimate reasons why one might not want to use a credit card.

For example, every time you use a credit card, unlike a debit card, it costs the merchant you are purchasing from an “interchange fee.”  These interchange fees can add up for the merchant over time.  In fact, credit card issuers were recently hit with an antitrust suit by the DoJ which might change the way these interchange fees work.

Because of these interchange fees, one might want to support a particular merchant by purchasing from them using cash or a debit card to save them money.  One also might feel morally opposed to charging merchants extra for providing the same service to you.  I think these are legitimate reasons to avoid using a credit card.

There are other, legitimate reasons to choose not to use a credit card.  The above is just an example.

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I’ve been a long time listener to NPR’s Marketplace Money.  In general, I think that MM offers good financial advice.  However, one piece of financial advice that they’ve been offering a lot lately has irked me a bit.  Specifically, they have advocated that people stop using credit cards to pay for things, and to use cash or debit cards instead.  The rationale behind this advice is that using a debit card or cash prevents someone from taking advantage of a high credit limit to spend recklessly.

While I agree that getting rid of a credit card makes it harder to spend a ton of money, as opposed to paying with cash or a debit card, I think that the effect is overrated.  Holding a credit card doesn’t magically transform any individual into a crazed lunatic that must exercise every cent of spending power they have available.  Conversely, cutting up one’s credit cards does not magically transform a spendthrift into a saver.  You don’t need to have a credit card to overspend – one can spend too much with a debit card or with cash.  While it can be a really bad idea to spend more money than you have by overusing your credit limit, it is also a really bad idea to spend all the money you have by constantly emptying your account at the ATM.

The suggestion that people should cut up their credit cards also ignores the benefits that come from holding and using a credit card.  Credit cards help consumers build credit.  If you go through your life without holding a credit card and regularly paying off its bill, all else equal, you’re going to have worse credit than your neighbor who does this.  That means your neighbor will be able to get better loan rates than you, which means your neighbor will effectively be able to buy a house or car for less money than you.  When my wife and I went to buy a car last summer (before we were married), we had to use her credit as the basis for the car loan.  While we had very similar credit histories (student loans, credit cards, etcetera), she had held a credit card for a couple years longer than I had, and had built a stronger credit history as a result.  That meant we could get 0% financing for three years on our car loan, as opposed to paying hundreds of dollars in interest over the course of three years.

Credit cards also offer better purchase protection than debit cards.  While credit cards and debit cards protect their users from liability from fraudulent purchases by people who steal their card numbers, the main difference between having your credit card and debit card stolen is what happens while the bank undertakes an investigation to determine whether the charges are actually fraudulent.  If you have a credit card, the charges aren’t missing from your bank account for weeks while you wait to find out whether the bank thinks the charges are fraudulent.  If you have a debit card, the money is missing from your bank account until your bank determines the charges were fraudulent and reimburses you.  If $10,000 is missing, that might be a real inconvenience to you that you would not be missing if you had used a credit card.

Credit cards also offer many cash benefits that debit cards do not.  Many credit cards offer cash back or travel rewards.  By using a credit card for our everyday purchases, my wife and I receive a few hundred dollars per year in cash back.  We don’t have to do anything to receive the money.  We don’t have to pay any annual fees for our cards, either.

In conclusion, I think it’s better to tell consumers to exercise self control than to tell them to cut up their credit cards.  It’s still possible—and not that difficult—to overspend using debit cards and cash.  Additionally, responsible consumers without credit cards are putting themselves at a disadvantage to responsible consumers with credit cards.

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