When you buy produce from local farmers, it is beneficial to you and the farmers

Texas farmers, and farmers all across the country, have seen tremendous declines in revenue because of the higher costs of distribution. In support of local farmers everywhere and especially in Texas (where Liberate Magazine is located), we are asking everyone of our readers to buy local. Many cities, such as Dallas, have farmer’s markets where you can purchase fresh fruits and vegetables directly from the vendors.

The fresh produce is great and the impact it has on the “”little guy” is even greater. Find out where the local farmers are in your community and purchase from them. Here are some links to farmer’s markets throughout Texas:

Austin Farmer’s Market

Dallas Farmer’s Market

Houston Farmer’s Market at Rice University

Toyota has so far sold 18.9% of the vehicles bought through the Clunkers program, while GM is now second, with 17.6% of Clunkers sales. Ford Motor Co (F, Fortune 500). ranks third in Clunker sales, followed by Honda and Chrysler.

GM has gotten a little too excited. They are rehiring people, opening plants and basing their future on a temporary program.  The current demand is still not for GM vehicles, the demand is being driven by the savings of the Clunkers program.  I like to refer to this as misdirected demand. In other words an incentive serves as a buffer between a product and a consumer, hence increasing the consumers interest in said product.

The problem with this type of demand is once the incentive is removed, the demand is no longer there. With the government program of Cash for Clunkers all automakers have seen an increase in sales. The ideal behind the program is to reduce the inventory of the automakers and reduce their surplus (I know they say it is to put more fuel efficient vehicles on the road). If  GM increases production at this point without further evaluation, you will have a company that slumps in sales again once the program is gone and they will be left with inventory that is not going to move.

It is not fair to hire employees, rehire employees, open new plants and create media hype over sales revenues that do not necessarily represent net revenue. The company is currently in bankruptcy. These are catch up and break even sales figures for GM. GM is showing the prime example of a “knee jerk” reaction.

Over half of the government’s Cash for Clunkers funds have run out already. According to CNNMoney.com, “$1.5 billion of claims have been submitted by dealers who have sold a total of about 360,000 cars.”  GM needs to think before they act. The demand is not driven by their cars, it is driven by government incentives that are temporary as will be the need for increased production.

“Agreement among competitors to (1) sell a good or commodity at the same price, (2) use the same formulas for computing selling prices, (3) offer the same discounts, (4) keep the same price differentials between different order quantities, qualities, or types, and (5) not lower the prices without notifying other competitors.”

Price fixing deprives the consumer of freedom of choice when searching for the best prices on goods and services. It was typically considered a criminal offense until 2007. A Supreme Court ruling two years ago allowed for some lose interpretation of price fixing by blurring the lines. The nations highest court, in 5-4 decision in June of 2007, ruled it was ,”no longer automatically unlawful for manufacturers and distributors to agree on setting minimum retail prices,” according to a New York Times report on the ruling. This ruling in some ways opened the door for price fixing.

As with any Supreme Court decision, this ruling set a precedent that threatened to change the 96 year old ban on price floors. From a consumer standpoint, it seems like price fixing puts them at a disadvantage. From an entrepreneurship standpoint, agreements between manufacturers and retailers could possibly be beneficial. This would allow an entrepreneur to get an equal return across the board on their product/service.

This was the logic behind the Supreme Court ruling. New products that come to market are a risk for retailers, but if the retailers have an agreement on a desired price for a new product, they will be more willing to sell it. In this manner, competition is encouraged because new entrepreneurs are given a chance to compete for spots in retail stores with out the store bearing the burden for the investment. This burden is handed to the consumer.

There is a new Maryland law that will take effect on October that seeks to indirectly challenge the ruling of the Supreme Court from two years ago. The Maryland law “will make it illegal for any manufacturer to tell any retailer what price to charge a customer,” according to ClarkHoward.com. Other states are sure to follow and challenge the Supreme Court decision as well.

It is going to be interesting to see how the Maryland law effects price fixing nation wide.

Fast forward to present day with this current economy and a growing problem has arisen. When the housing market took a plunge as a result of the exposure of the sub prime loans, many homeowners equity went with it. The result has been a problem typically only seen in the auto industry. Many mortgages are currently upside down. This normally happens when a person tries to trade in a car that is valued at less than they owe for it.

Now many homeowners are forced to make the unpopular decision of letting a home go into foreclosure or continue to make payments on something with negative equity. How did this happen? When these individuals purchased the homes, they had no idea the market would plunge into a downward spiral. As a result of this spiral the housing market is perfect for individuals interested in buying, but discouraging for sellers.

The mortgage crises has far reaching implications for the future of home ownership in America. When individuals are forced to sell their homes for thousands of dollars less than what it was purchased for, this is frustrating. As home values continue to plummet, this devaluation of homes will continue at an alarming rate.

16 million homeowners are “upside-down” on their mortgages, up from 10 million, or 15% of owner-occupied homes, one year ago

According to a recent Wall Street Journal Article,”Some 24% of owner-occupied homes had mortgage debt that exceeded the values of those homes at the end of June, according to data from Equifax and Moody’s Economy.com. That number rises to 32% when looking at the share of homeowners with mortgages that don’t have equity left in their homes.

Nearly 10% of owner-occupied homes now have mortgage debt with loan-to-value ratios of at least 125%, and roughly half of those homes have mortgage debt with loan-to-value ratios of 150% or more.”

The federal government is offering $8,000 dollar tax credits to home buyers, but sadly there are not many programs to help the individuals losing their homes that have worked well across the board.

Heist movies are often very popular because the characters seem larger than life. They do outrageous things and never get caught. They have the latest high tech equipment, great connections and limitless cash. In the movies, the thief seems to have an elaborately designed plan and executes it flawlessly. For example, in Ocean’s 11, the main characters walked right out of the front door of a casino after a heist with millions of dollars. This is a clear representation of Hollywood’s tendency to glamorize the hero villain, the “bad guy” that actually becomes the “good guy.”

Sometimes reality is played out better than the best of screenplays and Hollywood scripts however. There are many screen writers and authors trying to figure out how some British thieves robed the luxurious Graff jewelers in broad daylight without masks and made off with approximately 65 million worth of merchandise.

Why is this a good script for Ocean’s 14? The thieves were caught on video tape and still have not been found. They had their escape well planed for a high level robbery in broad daylight. These thirty something young men have pulled off the biggest heist in British history.

The planes were initially requested by the Pentagon and Congress doubled the order. They had requested more of the Gulstream Luxury jets for “official” business. The public was rightfully outraged when the word spread. Today, that outrage produced positive results, Congress suddenly realized the error of their ways and ended their request to double the original order of planes. I wonder why? Maybe someone sitting at home wondering how to pay the mortgage appealed to their senses or maybe they just realized the request was ridiculous.

An Austin Ford dealership participated in the program and as a result fears it will be left with over $180,000 in unrecoverable government rebates. The dealership became alarmed when there were talks of the program running out of money, but the “damage” was already done. What was their brilliant solution? They began to call customers and ask them to bring their brand new cars back.

“Buying a vehicle from a used car lot may be more beneficial in the long run for today’s average consumer.”

Is this the customers fault? The customer is not responsible for the poor planning of the dealership. In addition, these cars are now in the customers’ names. The dealership sold about 40 cars under the program, but none of their trade in “clunkers” have been approved. They have vowed to fix the problem by getting “clunkers” pre-approved before the customer signs on the dotted line now.

Some dealerships in Austin have quit the program all together until they see the way the Senate is going to vote on the issue. Used car lots are beginning to look better and better. Actually, buying a vehicle from a used car lot may be more beneficial in the long run for today’s average consumer. The terms of the loan are lower, and the credit requirements are more lenient.

You can drive a luxury vehicle for less than half the cost.

Many used car lots now have what is called in-house financing. This type of financing means the dealership will carry the loan for you to full term. These loans are usually only granted for between 24-36 months. Typically, these used car lots will also require the following things in return:

1. At least 10-20% down on the vehicle
2. Proof of income
3. 5-10 references
4. Proof of residence
5. Proof of insurance

If you can provide all of the things listed above, you can drive away in a nice vehicle with less headache. These type of car lots are also more beneficial to the entrepreneur and small business owner because:

1. It helps you to build business credit (many of these dealerships report to the credit agencies)
2. They are more lenient on payment dates
3. You can drive a luxury vehicle for less than half the cost.

The only downside to purchasing from a used car lot is the vehicles will have higher miles and there are no warranties. You basically are buying a vehicle “AS-IS.” Do not let this deter you. Many used car lots are members of the Better Business Bureau and although there isn’t a written warranty, they are concerned about their reputation. When purchasing a used car look for the following:

1. A Better Business Bureau membership
2. Find out how many complaints have been filed against them
3. Make sure they have on site mechanics because this means, in most cases, they have resolved any major issues with the vehicle
4.Look for family owned businesses with a long history in the community because they have more of a stake in their reputation
5.Find out how much repeat business they have

If you follow these guidelines a used car lot may be a more favorable option for you instead of the “cash for clunkers” program. You may ask,”How am I going to get my down payment?” This is easy. To participate in the federal program, your car has to be worth the rebate amount. Why is this valuable information? You can sell your car on Craigslist.com for the retail value, buy a new car, and possibly have money in the bank. Get your own “cash for your clunker”!

Federal tax rates are based on how much money a person makes. The levels of taxation are called tax brackets. The more money an individual makes, the more they are required to pay in income taxes (or the higher bracket they are put in). If a person pays more in income tax than their estimated tax liability, they are given a refund. People also acquire refunds by having deductions such as children, charitable giving, etc.

This is the current tax structure. Some Americans are not happy about the current tax system. Critics of the federal income tax feel a person should not be penalized for “hard work” or making more money. They argue taxes should be based on a person’s consumption and not their income. The Fair Tax is designed to change the federal tax laws of the United States by replacing all federal income taxes with a single national retail sales tax. This would only effect taxation at the federal level.

With the implementation of the fair tax, a person would no longer be taxed on how much they make, but rather how much they spend. With a national sales tax on goods and possibly services, the majority of an individual’s tax burden would be imposed upfront. This ideal of a fair tax is gaining momentum in the current economy. Under this tax plan, everyone from Millionaires to Welfare recipients will be taxed equally based on their consumption level.As stated by the fairtax.org website:

“The FairTax is revenue neutral at $0.23 out of every retail dollar spent.”

Liberate Magazine seeks to inform the public about the fair tax by presenting this series on it. Both sides of the argument will be presented for and against the fair tax. For a more in depth overview of the fair tax, visit FairTax.org.

The House has voted to extend another two billion dollars to the program. The Senate must now approve the additional funds to be allocated from stimulus money. Will it be in the best interest of the consumer to extend the program? The economy will answer this question. It is interesting to note car sales were down until the program was implemented. If the money has run out and the Senate does not approve the additional funding, what will happen to the dealerships that cannot get their rebate money from National Highway Traffic Safety Administration?

There are estimates over 250 thousand cars have been sold as a result of this program. What about the “clunkers?” Many of these cars are not in bad condition. Instead of destroying the clunkers, why not sell them to a foreign country where they can be used. In today’s green society, surely all of this waste cannot be beneficial. We have a suggestion from Liberate Magazine to pour more money into the Cash for Clunkers program…sell the clunkers to foreign markets and you will gain the funds you need.

There is something much deeper than the story of race and resolution however. Yes, there is something so important it has taken precedence over the reality an American President is actually standing up to face race relations head on. What is the bigger issue? What beer will the President be drinking?!

In all seriousness, many American beer companies are in an uproar over the president’s choice of beverage tonight. Why? None of the beers selected by the people in attendance of the “beer summit” were made by American companies. They were all essentially international beers. I first heard this “breaking news” while I was driving today in Austin’s rush hour traffic. Apparently, Professor Gates drank Red Stripe, Officer Crowley drank Blue Moon and President Obama drank Bud Light.

These beverage choices angered the American beer companies. In defense of the President, Bud Light is about as American as baseball, real football and Route 66. You see Bud Light is owned by Anheuser-Busch, a company that had a rich history as an American company since the late 1800s until last year. Anheuser-Busch sold the company last year to Brazilian-Belgian brewing company InBev.

I have some advice for the American brewing companies…quit selling out to international companies and maybe there will be something American left for future generations to use at “beer summits.” There are more implications than beer here. How many times do we as average consumers assume a company is American when it is not, but it used to be? This is simply a sign of the times.

Maybe the President should invite the beer companies to a “beer summit” to resolve this issue and they can bring their own. Just a thought…