Rhesus Monkeys

It’s Tuesday, which must mean that you’re in desperate need of your weekly tax fix. Well, it’s not quite “Ask the Taxpert”-worthy IRS advice, but for my junkies out there, I hope this will suffice.

Right before the big tax deadline, The New York Times ran an article about taxing as a rite to be a member of society. The Times compared human taxing to rhesus monkeys and food calls, where a monkey who happens upon a tasty morsel must call out to the rest of society and share. If a monkey fails to do so, he is subject to excommunication from the rest of the group and vicious beatings.

Basically, the IRS is the rest of the group of monkeys who makes the implicit threat of violence, while the rest of us dutiful taxpayers are the monkeys who happen upon the tasty morsels and must make our contribution to society.

And so this example repeats throughout the rest of animal kingdom, although instead of money, the valuable resource to be redistributed is food. Members of the group who have more of this precious resource are better fed and must give up some of their share to the rest of society to equalize the wealth, making sure they all get fed, too. (Although Darwinism would say, let them starve, survival of the fittest and weed out the bad food scavenging genes!)

Applying this line of logic to human society, shouldn’t the richest percentage of Americans pay the most tax? Unfortunately, with the Internal Revenue Code as it stands, these members of society rarely pay the full proportion they should, despite numerous attempts at tax code revision by the politicians. But then again, the wealthiest also donate to these politicians’ campaigns. I blame the political contributions: after all, nature doesn’t have a corresponding example for politicians getting reelected.

Tijuana Donkey Show

A swine flu epidemic is the last thing the economy needs. Even if it gets stopped and doesn’t spread, it’s already wreaked some havoc on the world of finance.

Crude oil has dropped roughly three percent in light of the recent swine flu news. Worries over less travel have begun to unravel the commodity’s twelve percent increase this year in just a couple of days.

The global economy is forecasted, according to the International Monetary Fund, to shrink by 1.3% despite a 0.5% prediction to grow earlier this year.

The U.S. dollar has grown in strength, appreciating 1.6% against the Euro from last week (at $1.3036). Continued fears over the economy shrinking will persist in driving the dollar up. One must also keep in mind the World Heath Organization has upgraded the swine flu pandemic alert to phase four, which represents sustained human to human transition, out of six. What then?

My thoughts? It isn’t worth the donkey show.

Robert Orben, American Magician & Writer

Freakonomics blogged about how Texan Timothy Dale Edwards (profession: hobo) is using a website called PimpThisBum.com to attract more donations to his collection efforts. The key reason why he’s using a website in particular to get donations? Two words: credit cards.

Why are credit cards so important? Well, according to consumer psychology studies, we’re more likely to part with money if it’s done through credit cards – an “invisible” transaction, so to speak – as opposed to cash, where the money is literally leaving our hands. This lower psychological impact drives up our willingness to give more to a hobo.

A thought for the bums of Penn (and I’m not referring to some of the guys who go here…kidding!): find some generous web designer who will make a website for you to get better financial results than traditional can-shaking in front of Mickey D’s.

http://www.getrichslowly.org/blog/

Here’s a taste:

“Role-play will be a lot less pleasurable. We have split the world into two pantomimic parts: the evil (the bankers) and the good (everyone else). In future, sorting out villains and victims will require more imagination.”

Al Gore, 45th U.S. Vice President & Environmental Activist

“Certainty? In this world nothing is certain but death and taxes.”

-Benjamin Franklin

…So that’s why the IRS is so darn persistent.

What's the world coming to when you can't rely on speculation and rumor?

I don’t know what world The Wall Street Journal is living in (perhaps you can find a dimension or universe that I can’t) but the economy is well on it’s way to recovery. In a recent article, the WSJ laments the performance and over valuation of Bank of America Corp. Shouldn’t the fact that stocks are being inflated again be a sign of recovery?

The way I see it, if people are confident enough to jump onto Wall Street with no idea of what they’re really doing—as most do, kind of like the California Gold Rush—in search of high yield profits, then the economy is once again performing the way it should be. Stock speculation is a time-honored tradition. Yes, it comes with dangers. Hell, Mark Twain wrote, “October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February.”

The problem with this vice however, as with any vice, is that oftentimes, the gains outweigh the drawbacks, if only for a certain period of time. For once though, it is the other way around.

In a recent statement by Federal Reserve Vice Chairman Donald Kohn, we see “The crosscurrents in the recent data and a bit more favorable financial news of late stand in contrast to the uniformly bleak picture of a few months ago.” The developments “may be an early indication” that the economy’s contraction is slowing and it will stabilize later this year, he said. While it is true that “we are not out of the woods yet,” the economy is becoming less and less volatile.

While the economy has experienced constant small contractions, the overall trend is upwards. All of these contractions have been outweighed by greater expansions in a longer-term picture. Case in point: my favorite stock, Ford. Ford stock value has dropped from 4.01 to 3.69 in the one day since the weekend. A big contraction indeed. But when one looks at it in the light of the past month-to-date, it has more than doubled in value from a measly 1.58. No small gain.

Will this continue? Or will the rubber band snap back with a resounding clap? My opinion: short now, buy later.

In honor of Fling weekend, when I know levels of readership are so low that it’s only second to Spring Break, here is a lighthearted but real post on rising beer prices.

Many places around the world and some states in the U.S. have been considering hiking up excise taxes on beer and/or alcohol. An excise tax is a euphemism for a sales tax on specific items, often ones that the government would rather see you not partake in, such as alcohol and cigarettes.

This means that when you buy beer in one of these places, the price that you pay for the whole shebang just got higher, which leaves you, the student in want of beer, poorer.

Roll call of some places where beer just got more expensive or may get more expensive pending future legislation after the jump.

• Arkansas
• Florida
• Indiana
• Massachusetts
• Minnesota
• Nevada
• New York
• North Carolina
• Oregon
• Albert, Canada
• Australia
• United Kingdom