Posts from — January 2009

If you’re in New York City on February 19, please join me at In The Flesh to celebrate Susie Bright’s gorgeous new anthology, X: The Erotic Treasury. I’ll be reading along with other contributors, and Susie will be taking questions and signing books.

Here’s a description of the event from In The Flesh host/curator, Rachel Kramer Bussell.

Susie Bright Night at In The Flesh, February 19th, 7:30 pm

posted by Rachel at 8:00 AM

From this week forward, the focus of my column on Young Money is shifting from news recap to a broader range of economic, personal finance, and lucre-related topics. Here’s the debut.

Online Identity Makeover: Dress Your Profile for Success

by Lisa Montanarelli

Suppose you had a double who looked like you, spoke like you, had the same name, and sabotaged your job prospects. Time for a restraining order, right? Well, thanks to the Internet, we all have plenty of doubles running around—some more employment-friendly than others. Remember when you could jump out of a cake in a tutu or streak across the Brooklyn Bridge without debuting on YouTube the next day, and your most embarrassing moments weren’t even Google-able? But forty years after the first human walked on the moon, millions of us are leaving digital footprints all over cyberspace. In my next few columns, I’ll help you put your best digital foot forward.

First let’s focus on harm reduction.

For beginners:
Welcome to the world of social networking sites, where what you post and what others post about you may be available to anyone who cares—unless you take action. Assume that your present or future employers are Googling you, and that what you say on your profile or blog can potentially hurt your job.

Unless you want to use your profile as a professional networking tool, choose a social networking site that has privacy settings and limit who can view your profile.

Facebook gives you lots of privacy options. If you’re on Facebook, click on “settings” in the upper right corner, then click on “privacy.” You can control who can see your personal info by making your profile page, status updates, photos tagged of you, videos tagged of you, wall posts, work info, and many other Facebook offerings visible to “only friends,” “friends of friends,” “networks and friends,” or in some cases only to you.

You also have a say in who can search for you, how you can be contacted, and what stories about you get published to your profile and to your friends’ News Feeds. You can even block particular people so they can’t find you or view your profile on Facebook. Choose settings that will prevent your boss and coworkers from viewing potentially compromising posts or photos. If you have hundreds of friends on Facebook, many of whom you barely know, you probably don’t want to post anything that you consider “private,” or wouldn’t want your boss to see.

This seems easy enough, but now that you’re fiddling with your privacy settings, perhaps you’re wondering what your boss can legally fire you for?

Read this column on YoungMoney.com

1. Credit Card Companies Court College Students

On January 1, the New York Times ran a story about Bank of America’s $84 million contract with Michigan State, in which the college gives the bank students’ names and addresses and receives money when students apply for Bank of America credit cards. Hundreds of universities have these agreements with banks and other lenders. Bank of America has contracts with roughly 700 universities and alumni associations.

If you’re a college student, watch out—especially if you already have student loan debt. See if you can opt out of having your contact info publicly displayed in school directories. Jobs will be scarce due to the recession, so it’s better to graduate with as little debt as possible.

2. Obama Takes Stimulus Package to Congress

On January 5, his first full day on Capitol Hill since the election, President-elect Obama met with Democrats and Republicans to build bipartisan support for his recovery package. He asked for $675 to $775 billion over two years. The package, which would cover health, infrastructure, energy, education, and help for the poor and unemployed, allots 60 percent to public spending and 40 percent to tax cuts for workers and businesses. The tax cuts—$500 for individuals and $1,000 for families—would go to the estimated 150 households earning under $200,000.

Obama is urging Congress to pass his plan by February 16. On January 8, he warned that the nation could face two-digit unemployment and years of recession if Congress does not act promptly.

3. Economic Recovery Plan Looks Promising for Young Americans

Recessions are generally a good time to be in school, but recent grads may be hit hard. People just entering the workforce for the first time often have trouble finding jobs, earn less income, and are among the first to be laid off. They’re also more likely to work part-time and go without health insurance.

Given these concerns, Obama’s new stimulus plan looks good for young people. The plan contains proposals to extend unemployment insurance for part-time workers, subsidize employers’ temporary health insurance for laid-off workers, and permit laid-off workers whose jobs came without benefits to be eligible for Medicaid.

Obama also promises to “create or save” three million jobs over the next two years. He plans to produce some of these jobs through spending and tax incentives to double renewable energy production, build and repair bridges, roads and schools, conserve energy in government buildings, and improve and update health care technology.

4. Public Spending Enjoys New Popularity Among Economists

At the annual meeting of the American Economic Association in San Francisco, nearly all economists argued that public spending would be more effective than tax cuts in pulling the nation out of deep recession. This way of thinking has been out of fashion since the 1970s, but it makes sense: when we spend money on highways, public transit, hospitals, schools and renewable energy, we create jobs in the U.S. and we lay the groundwork for a healthier and more productive economy.

Tax cuts put cash directly in consumers’ hands—thus sparking the demand for goods and services—but they don’t necessarily provide a strong economic stimulus, because people might save the money instead of spending it. This is especially true now—with consumer confidence at an all-time low.

Most economists want a mix of tax cuts and public spending, but they disagree about what the split should be and what kinds of projects the government should support. Obama’s plan to devote 40 percent to tax cuts sounds high to many economists, including Nobel laureate Paul Krugman. Sources say Obama is aiming high to appease Republicans, so Congress will pass the legislation faster. But some tax cuts are necessary—especially in the next year—since many public projects aren’t “shovel ready,” and we need bold moves now. Most Americans are on hold, spending sparingly, expecting long months of recession with no end in sight. The longer this lasts, the more wages will drop and unemployment will rise.

5. Steel and You

You may not think much about steel, but you probably can’t get through the day without using steel. It’s in the buildings where you live and work, your car, the utensils you use to eat and cook, your laptop, refrigerator, washing machine, dryer and light bulb sockets. And steel is now the bellwether of our nation’s economic health. As steel production collapses, so does our economy.

The steel industry was thriving when the recession hit in December 2007, but since September, the output of steel has dropped 50 percent with the decline of manufacturing and construction. Steel execs have anxiously awaited the details of Obama’s stimulus plan and pleaded for massive public spending on highways, subways, bridges, hospitals, schools, electric power grids and water treatment plants—all of which would boost the demand for steel and create jobs, too.

So watch the steel industry. It might be the first sign of economic recovery.

6. Obama Pledges to Post Government Spending Online

Like millions of other Americans, you’ve probably wished we knew how Paulson was spending the $700 billion bailout. On January 6, Obama promised to create a new Economic Recovery Oversight Board and post all government spending on the Internet in an easy-to-search, user-friendly format. So look forward to pointing and clicking on where your tax dollars go.

7. The Lowdown on the Low Dow

Virtually all stocks lost value in 2008. According to the MSCI world index, the market plunged 42 percent ($29 trillion) in 2008. In the U.S., Standard & Poor’s 500 dropped 38.5 percent, while the Dow Jones industrial average fell 33.8 percent, its worst downturn since 1931. The broad European market index, the Dow Jones Euro Stoxx 600, declined 46 percent, and the MSCI Asia-Pacific index was down 43 percent. Many emerging markets fared even worse: in Mumbai, the Sensex 30 declined 52.4 percent, the Shanghai composite index fell 65.4 percent, the Russian RTS index plummeted 72 percent.

What does all this mean for young investors? Well, be glad you’re young. Hopefully you’re in the market for the long-term. If you got caught up in the frantic sell-off, there’s still time to learn from your mistakes. Most forecasters say don’t expect a quick rebound, but the market will come back.

8. The Coming $1.2 Trillion Deficit

On January 7, the Congressional Budget Office projected that the federal budget deficit would reach $1.2 trillion in the next fiscal year—more than two and a half times the $455 billion shortfall of 2008—and unemployment, which was 6.7 percent in November, would soar above 9 percent by the end of 2009.

Obama plans to curb the deficit by cutting out wasteful spending and reinings in Social Security and Medicare, which will consume more government spending as baby boomers retire. He appointed Nancy Killefer, a former Treasury Department official under Clinton, to act as the nation’s first chief performance officer and scrutinize government spending “line by line.”

9. Coal is Unclean

Last month in East Tennessee, a coal ash dump ruptured, spewing a billion gallons of toxic slime. Experts say government oversight could have prevented the spill, but these dumps for the byproducts of burning coal aren’t subject to any federal regulations.

The amount of coal ash has soared, partly because air pollution controls have reduced the amount of coal burning byproducts that escape from smokestacks and increased the amount captured in solid form. The U.S. is home to more than 1,300 dumps, spanning up to 1,500 acres and contain mercury, lead, arsenic, selenium and other heavy metals, which the E.P.A. considers harmful to human health. In 2007, the E.P.A. identified 63 sites where heavy metals from the dumps had contaminated the water.

Marylanders can rejoice because last week, a judge approved a $54 million class-action settlement against Constellation Power Generation, which contaminated wells by dumping coal ash near Gambrills, MD, 20 miles south of Baltimore.

10. China Buys Chinese, Eats Less U.S. Debt

While a trillion-dollar deficit may sound appalling, the good news is that Uncle Sam has excellent credit. U.S. Treasury bonds are considered one of the safest investments in the world. That’s why investors have been gobbling up Treasury bonds as global markets plunge. This high demand allows American borrowers, including the U.S. government, homebuyers and students, to take out loans at lower rates.

China, one of our most voracious investors, has bought over $1 trillion of U.S. debt. But now that China has to fund its own $600 billion stimulus, it’s losing its appetite for U.S. debt and buying Chinese, much as we “buy American” to help our economy. This will raise the wretchedly low standard of living in China, but it may also increase the interest rates Americans pay on loans.