Business news

Would you take a loan out on your IRS refund?

http://seattletimes.nwsource.com/html/businesstechnology/2003534092_stupidinvestment21.html

Apparently enough people are doing it to cause concern for the government and consumer advocacy groups. Early filers with tax preparers take out "refund-anticipated loans" on their future tax refunds because they are desperate for the cash pronto and can't wait for Uncle Sam. H&R Block and others offer very high-interest loans on money that doesn't even belong to them. This encourages accountants to over-estimate the refunds to taxpayers, so that they can take out larger loans from the company. That worries the IRS of course, which doesn't want to get short-changed. Consumer advocacy groups are also crying foul, as this new predatory practice is similar to sub-prime mortgages and pay day loans. In our free market, you can even use your tax refund to get yourself more in debt!

Intel pulls out of One Laptop Per Child (OLPC)

http://news.yahoo.com/s/ap/20080104/ap_on_hi_te/intel_one_laptop_per_child

Some altruism. The chief corporate sponsor behind OLPC (or the $100 laptop project) has decided to bail out over disagreements on the sister product version which Intel will market independently. The "XO" devices currently cost about $188-250 to make, but it was hoped to sell at the $100/unit level if foreign governments bought enough of them (on the scale of millions of units - good luck!). Intel might have felt snubbed because the program management favored a cheaper processor from rival AMD. Intel is trying to market its own version of the cheap laptop called the "Classmate". They claim that it's good for customers to have some choice in the cheap PC market. Meaning they don't want AMD to enjoy all the spoils.

http://www.un.org/ecosocdev/geninfo/afrec/vol14no2/educat.htm

To me, the whole program is commendable but misguided. If we gave the XO laptops (or even used computers) away for FREE to poor children, who may not even know how to read/type or have access to reliable electricity, that is one thing. But expecting impoverished, debt-ridden governments to fork over $100-200 per computer is shameful, when they are plagued by corruption and have many other national priorities languishing due to tiny budgets. Primary education spending in Sub-Saharan Africa is around 3-4% GDP, so how can they afford computers? America spends over 6% GNP according to the CATO Institute; we're the richest nation and many of our schoolchildren lack modern computers or even books! Some NGOs are only asking for $20 donations to support a Kenyan student for a year ( http://www.onehereonethere.org/about/howitworks/ ). That's books, pencils, and maybe assistance to teachers or classroom improvements. If you've ever seen or read about a typical rural Third World school, you know they need a lot of other stuff more critically than they do laptops. Look at what else $100 could buy for poor nations:

76 units of Viread anti-HIV/AIDS medication (at $1.30/dose)

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/04/04/BU301031.DTL

22 insecticide-treated bed nets, good for 5 years, that greatly reduce the risk of malaria ($4.50/each)

http://www.anglicanmalariaproject.org/in_depth.html

100 second-hand eyeglasses (at $1/each)

http://eyesonafrica.info/

By the way, malaria and AIDS are both top 5 killers in the Third World, and international organizations estimate they cost poor nations over $10B in medical expenses, containment, and lost productivity. The WHO estimates that a billion people who need corrective lenses are lacking them.

Actually getting kids to school is already a challenge, since poor families may prefer to keep their children at home for labor, and many nations don't have enough teachers, classrooms, and supplies for all the kids who want to learn. I know Professor Negroponte at MIT and the OLPC project mean well, but the involvement of Intel or other big-money corporations suggests that this may also be a strategy merely to create more computer customers in an untapped market. These kids will get exposure to PCs at an earlier age, and will want to be "plugged in" for the rest of their lives, like Western kids. And computers are boring by themselves, so they will want to buy software, peripherals, iTunes, and better computers down the road, if they can afford them. Some families don't even make $100 a year. Yes they will get a better education, learn marketable skills and computer literacy to be more competitive in the global economy, but remember there are very few white-collar, computer-based jobs in the Third World. If all of them immigrate to rich nations to study, work, and consume, then Africa will be even more brain-drained and worse off!

Gotcha Capitalism

http://www.npr.org/templates/story/story.php?storyId=17898418

Inside the world of all the hidden or subtle fees/surcharges/etc. that utility, banking, or other companies levy on the US consumer (on average about $1,000/year).