Wednesday, March 20, 2013

Unintended Success

I did something today that I never do - I watched a bit of Ben Bernanke's speech following the end of the FOMC. Other than being totally crisis-ed out over the government, economy and world, Ben's recounting of the Fed's successes in fixing the economy struck me as almost comical. I say that to not say "sad."

Stay with me for this analogy. I love them!

I don't know about your corner of the world but challenging property tax assessments in the NYC suburbs seems to be big business. I get letters from a half dozen or so companies periodically asking for permission to challenge my assessment on my behalf. For their troubles, I would agree to pay them half of the first year's savings.  Considering property taxes here in a tony Nassau County village easily top $20 grand (you read that right - twenty thousand dollars per year - how else can we pay our school superintendent a half million a year? - giant eyeroll - sad but true) and some of the newer, bigger properties are over $30 grand the savings can be big.

FWIW, I am talking about sizable houses on an acre of land but not true Dynasty or South Fork mansions overlooking the Malibu surf.

One year, I actually hired one of them. My tax assessment went down and I had to pay them a few hundred dollars. Sounds like a good deal. If my taxes did not go down it cost me nothing. And any savings was more savings than I had before so again, a good deal.

Then it dawned on me what had just happened. It was 2008 and house values were plummeting. My own house was down about 20% since I moved in three years earlier and my taxes would have gone down anyway. Keep in mind that the assessment process has a two year lead time so the benefit would not appear until 2010 or so.

But the tax reduction company took full credit - just like the current administration and current Fed.

While I do have strong feelings about economic mismanagement by the current government, let me say that I thought the previous government was lousy in that regard, too. Keep your liberal fireballs to yourself. And conservatives, don't send me any fundraiser requests, either.

Everyone thinks their efforts nursed a recovery while I say it was the never ending spirit of entrepreneurs that refused to quit. Or the natural rebound from an economic calamity that occurs sure as day follows night.

So, Mr. Bernanke, you do not get to pat yourself on the back. If you had taken your trillions and paid it directly to citizens you would have seen a better result. Right now, only banks and investors smart or lucky enough to be in the stock market for the past few years are thriving. And only companies of other types smart or lucky enough to be doing business overseas are making profits that drive their stock prices higher. It is not the domestic economy, that is for sure.

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