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Thursday, February 12, 2009

Bank of America Shenanigans

And this company received bailout money. Wait until you hear my story. I'll post this weekend. Scandalous!

Monday, February 9, 2009

Amazon Releasing a New Kindle, but Nobody has the Old Kindle

So Amazon is poised to release a new version of it's ebook reader, the Kindle. According to ZDnet, it will be called the Kindle 2.0, and the Wall Street Journal reports that Stephen King will be releasing an exclusive novel available only to Kindle owners. An exclusive book is a weak consolation gift for a device that costs nearly $400. The problem with the Kindle is that nobody cares about the Kindle. Why? Well, for starters, the name is lame. What fire are we supposed to start with this ugly, clunky, and overpriced gadget? Second problem is the size. Has Jeff Bezos seen the adds for the iPhone with the book reader app? The iPhone is far smaller and has the capability of a mini-computer. The Kindle? Well...take a look:

It looks like something that came from the 1980's. Maybe this clunker can finally allow E.T. to phone home. So we get it you say, it's big, ugly and poorly named. But wait until you hear the price. It originally retailed for $399, and it was later reduced to $359. Used ones start at $240 on Amazon's site. If the 2.0 is priced similarly, why should one shell out the same amount of money that could be used to purchase a laptop? The book savings are not really all that great either. The average book for the Kindle is still about $10. Not exactly a pittance for a book.

I just read Jeff Jarvis' "What Would Google Do?", and I think that Amazon could learn a lot from this book (I read it for free actually, while sipping a coffee at Borders). Books need to be distributed in a low cost or free model if readers are going to flock to these ereaders. Until then, people will continue to give you odd looks when you ask them if they know what a Kindle is.

But I have to admit, this video is compelling:

Saturday, February 7, 2009

The Bailout We Need


We are inundated everyday with news about the nation's economic crisis. The news each morning relates grim figures of falling employment, slagging consumption, failing financial institutions, home foreclosures, and growing consumer debt. Automakers are in trouble, school districts are in trouble, banks are not lending money. What's the solution? I, like many of you cruise the internet looking through money-saving blogs and articles like LifeHacker, GetRichSlowly, FrugalUnderground, and ZenHabits. I scour Coupon Mountain and Coupon Cabin before I buy anything. I have even setup budgets with Microsoft Money, Wesabe, and Mint (the best!). I have a Upromise account that pays down part of my student loans with each purchase I make. Which brings me to my solution to the economic crisis. Dear President Obama, I hope you're listening (afterall we do follow each other on Twitter).

Giving money to automakers and banks, extending benefits to the unemployed, and providing tax credits sounds all nice and flowery, but will it really impact the middle class? No. The children of middle class families (like myself) have worked their tails off early in life to earn great grades in high school while working a job so that they have the grades and savings to pursue a college education (many of who will be the first of their family to do so). What no one warns them of is the crushing debt they will carry after their hard-earned degrees are conferred. The kids graduate only to find that the slackers in high school who eschewed the college route are now earning more than they are. So it's off to grad school to further one's education and increase earning potential (and amass more debt).

So now the middle classers have a grad degree and $100,000 worth of debt as they attempt to begin a life and career. Trying to obtain the necessities like a car (which makes getting to work far easier) and housing (having a place to live increases the likelihood of obtaining gainful employment) and begin a life (like getting married since you're now 30 yrs old after finishing your education) is a daunting prospect when combined with a mountain of student loan debt. We gave money to banks, and they issued no loans in response. New liquidity in the economy = 0. So the score is depression: 1, bailout: 0. We give money to automakers, and the score becomes depression: 2, bailout: 0. Bush's tax credits did not spur consumer spending, because people used the money to pay down debt, so another round of the same will result in a score of depression: 3, bailout: 0.

Want to improve confidence, credit scores, spending, and save the ecomony with one deft move? Forgive student loans. Investments in human capital will undoubtedly aid the nation in our new economy where we must work smarter than the rest of the globe. Absolving student loan debt instantly gives the middle class the money to shop and especially to finance big ticket items like cars and homes. This makes far more sense than giving 2008 homebuyers $15,000. Moves like that will only exacerbate the situation, because it carries no relief for the poor souls who bought a home when prices were peaking. Writing off student debt enables instant liquidity and give middle class America the breathing room they need to get back on their feet and to begin chasing the American Dream debt free.
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