Thursday, July 14, 2011

Social Worker Managing a Two Billion Dollar Portfolio

Michigan Senator Debbie Stabenow has a graduate degree in social work from Michigan State university.

Would you trust her to manage your money?

Would you trust her to manage $2 billion of your money?
Sen. Debbie Stabenow was also making headlines this week, touring Michigan to promote her Battery Innovation Act — legislation she plans to introduce in the Senate this week that would coordinate all aspects of advanced battery production, from research and development to manufacturing.
While the terms of Dow's recent partnership weren't disclosed, Stabenow's proposed legislation calls for the federal government to invest $2 billion into the effort that she hopes spurs a growing market.

I hatehatehatehatehate when politicians use the word "investing." Whenever a politician uses any variation of the word "invest," he's lying.

That's important, so let me say it again: Whenever a politician uses any variation of the word "invest," he's lying.

Investing means giving X dollars to someone in the hope that you'll get X+Y dollars back in Z time. With X, Y, and Z, you can calculate a return on investment, or ROI.*   Example: You invest $100 (X) in Consolidated Fuzz Corporation stock on January 1. On December 31, you sell the stock for $125.00 (Y). Your ROI is 25% per year (Z).

Politicians only use the X amount above - and they almost always get it wrong by factors of magnitude - and never, never, never give you a number for Y or Z. What they do with your money bears less resemblance to real investing than it does to throwing fistfuls of seed corn out a car window and expecting ethanol pumps to sprout up where they land.

In Stabenow's case, that may be the literal truth. She thinks she can feel global warming when she's flying, so who knows what she thinks would happen if you threw corn out your car window?
"Climate change is very real," she confessed as she embraced cap and trade's massive tax increase on Michigan industry - at the same time claiming, against all the evidence, that it would not lead to an increase in manufacturing costs or energy prices. "Global warming creates volatility. I feel it when I'm flying. The storms are more volatile. We are paying the price in more hurricanes and tornadoes."
This person is trying to spend $2 billion of your money. No wonder we're going broke.

* If you don't understand that because your degree is in something that ends with the word "studies," take a semester of accounting 101 at your local community college, after you've mastered some basic math, such as calculating percentages.

No comments:

Post a Comment