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I love how a $50,000 a year job can’t buy a house nowadays…
Here is my take on the credit system in the US
I returned to America in 2005 after 22 years so I had no credit history which was worse than a bad credit history – as I quickly found out.
I needed a co-signer for the apartment lease even though I wanted to pre-pay the rent for one year – which surprised me to no end as where is the risk to them??
I opened a bank account and even though I have a gold Mastercard and a Platinum Visa from China (less than 800 people in China have this card) all I could manage was a “first time” Visa card in the US with a $500 limit…with a co-signer.
Buying a car was the same story with extremely high interest even though we wanted to put 75% down – I got a co-signer but paid off the damn thing early anyway.
All I would hear from the BOTS was “sorry sir – you have no credit history” which means that to them I was more a risk than people who have proven that they don’t pay their bills!!
No matter what I did would not seem to help. Maybe the amount I deposited in the bank was not enough and the prestige credit cards from another country were useless. If you fall outside of the credit bell curve like me the BOTS can’t compute!
After 11 months we returned to China and beginning this year I get all these credit card offers – just like my folks said would happen.
Each time I get called about a credit card the BOT reading the script tells me I can transfer up to three credit cards to the new one and pay no interest for one year. When I say no, I don’t need to transfer any balance this seems to cause a short in their BOT brain. So they repeat the offer several more times making sure I “understand” it and each time I tell them I have no outstanding balances – which I don’t.
This tells me that many Americans get caught up in debt with a card, so they get another card until that is full so finally they transfer the collective debt from all the cards to a new card so the cycle again repeats.
Now I have about $20,000 available on all the credit cards thrown at me after I left the US. Maybe I’ll start collecting them and see how high I can go and then go nuts! LOL!
A little funny side note about one credit card Tele-Bot who I caused her brain to reboot for quite a few times.
She called my MN Vonage number and asked me how was the weather was in MN. It was about 2am, I was working late and said “I wouldn’t have a clue, I’m in Shanghai”
….silence and then she slowly asked “Is that Shanghai, MN?”
“No the Chinese one” I replied
“…………………….”Ok……………….So hows the weather there?” she finally asked.
“Dark” was my reply.
With out missing a beat she dove right in on the script about how great this new **Bank Visa card is. When she got to the point about if I bought something in a store and I didn’t like it and the store would not refund it the **Bank (Visa) will pay for it.
I was compelled to ask, “Even if I bought something in Shanghai and they won’t take it back the ** Bank will pay for it?
Silence…some…rustling of paper and then she said she has to ask and went away. When she returned she told me that this offer is valid only to US residents.
“I am” was my reply “Just that I’m in China right now.”
So she went away again, came back and told me this offer is good only where Visa cards are accepted.
I told her that Visa is accepted in China so if I buy a laptop and the shop won’t refund me ** bank will pay for it – and I get to keep it?
She went away again and when she returned she told me that if my laptop was stolen or lost the ** Bank will pay for it. (What happened to the refund bit I wondered?)
I then asked if I want to make a claim for a lost laptop which I bought on my **Bank Visa card will I need a police report?
Yes, she said.
Well, that will be in Chinese, is that ok?
Before she did another reboot I felt sorry for her and let her go on with the script.
In the end I did get the card.
What I am thinking about is should I try out the buyer protection plan? đ
Show of hands! LOL
Cheers
The problem with this comic is that, while it is correct, it doesn’t point out this simple fact. Walk out on any Wall St. trading floor, scream above the din, “Can I get a show of hands from the Democrats on the floor?”
You’ll be lucky if you only get silence, rather than getting hit with a barrage of flying phones.
The thing that gets to me is that so many people with income well below the median household income continually vote to deregulate these guys, thus creating the S&L scandal, the subprime mortgage fiasco, Enron, WorldCom and all the rest.
Perhaps it’s because the Democraps have also dropped the ball. Perhaps the Dems need to wake the fuck up and return to their roots as the party for the working class. When both parties are deregulating businesses like crazy and racing to cut taxes on the rich, people are left making a choice that will affect whether they can afford to eat this week based on abortion rights or the teaching of evolution.
Remember people, the Repugnicans are still deregulating and cutting taxes on the wealthy just a little bit faster than the Democraps. Wall St. knows this and still votes overwhelmingly for the Repugs for this reason.
So, if you want to ensure that Goldman Sachs traders can still get their $20,000,000 bonuses and CEOs can still get $100,000,000 salaries and all while paying ever decreasing taxes and shipping your jobs overseas, vote for Wall St; vote Republican.
I like it more when the bank gets to resell the house 3-4 times, gets MORE then the worth of the house and STILL keeps selling.
Iv never been told how the Fed works tho…
Let me guess..
As in escrow the bank sets Aside the amount to be loaned.
that money accumulates Interest from the fed.
That money is also getting interest from YOU.
ANd being paid BACK from you.
Its also interesting.
BEFORE the Interest rate went DOWN…
Credit cards were charging 9% over the Prime rate.
But the Prime rate went to almost 0%.
So the credit card corps RAISED that percentage…Up to 19%+ the prime rate.
It would have been GREAT if they would have stayed LOW.
I suggested to a credit corp 1 time.
Its interesting that the RICH pay Low interest,
But the Poor pay HIGH interest..
Wouldnt it be better the other way?
The POOR could Pay back, and would LIKE to.
And the RICh can afford to pay back MORE.
But for SOME reason the cost of building has gone up…
Wages didnt..
cost of imported wood DID…by over 25% And the costs have doubled.
#2 – TIHZ_HO,
Quite a story. Try out that buyer protection at your own risk, I’d say. I’m amazed you’ve got such patience to listen to that whole spiel, especially when it’s probably costing you a fortune in cell bills on a MN phone.
I suspect you’re correct about the way most of the U.S. runs up credit card debt. Personally, if I have debt that can fluctuate in balance, like a home equity line of credit, I like to pay it down at 0% for 10 months or so on a credit card, then pay off the card just before the interest rate kicks in. This can save quite a bit in interest payments. The problem is that banks notice such a pattern and remove the maximum on the balance transfer fee, making that card unusable for such a transaction.
I wonder if the banks have started to sell their credit card debt the same way they they do with mortgages. I seem to remember hearing about some CDOs that may be based on this. Perhaps that’s why the banks love to give credit to everyone almost regardless of risk. Or, perhaps it’s just the whopping interest rates that start on day of purchase if you have a balance.
#5 Misanthropic Scott – “…costing you a fortune in cell bills on a MN phone”
Its a not a cell its a Vonage (VoIP) full featured land line, unlimited national US calls. It freaks out my folks when they ring – its like a normal US phone.
I didn’t mind that call at all as it was late I was feeling like having some fun… đ
I think you are correct that “banks have started to sell their credit card debt the same way they they do with mortgages”.
Seems you are using the cards instead of the cards using you. If more Americans were as smart as you things would be much better for everyone – except the banks.
I have some friends in the US when they get a new card to them its like wining the lottery! My sister especially – if the card isn’t maxed out she feels she is doing something wrong.
I think of credit cards like the Mafia – they put money on the street and as long as you pay the ‘vig’ you’re ok…if not they work out a new payment plan… đ
To make a comparison to what people do in China – they generally use credit cards so they don’t have to carry sacks of cash.
There is a common joke in China:
A Chinese man reaches his 65th birthday and remarks “At last I saved enough to buy a house”
An American man reaches his 65th birthday and remarks “At last I paid off my house.”
Given enough time this may flip around… đ
Cheers
Cheers
Poor Scott – wrong about religion and wrong about politics. It’s not so much about which party is in power. The problem is a simple function of brave leadership. Anyone running for office with good intentions eventually gets railroaded by the system. The election machines simply can’t put a true leader with a real vision up on the podiums. Worse, we the voters seem unable to get behind a candidate with vision; we vote for what seems electable. (Well, except me – I voted against my usual party the last two elections, for all the good it did).
I see an increasing number of folks putting some stock into the Democrats for the next election, hoping they will do incredible things, but I don’t see it happening. In this particular issue, the fix is simple – ENFORCE (and enhance) THE USURY LAWS. Buit this won’t happen; it would be viewed as causing the collapse of an entire industry. I don’t see Hilary doing anything bold like restructuring the financial industry or repealing Sarbanes Oxley, or nationalizing the health INSURANCE industry. All I see ahead is more nanny state stuff. And it won’t matter which party is in power.
Scenario: You’ve no debt, own your home and cars, make the poverty limit income each year. But because at one time you were employed for $200,000 / yr., you’ve got 8 platinum cards, 3 of which have limits of $90,000 and offer 0% loans up to the limit. You find out you’ve terminal cancer and about a year to live.
Which bank do you screw first?
BubbaRay… ROTFL!
Cheers
BR…
ALL of them and FAST…
After the FIRST major transaction they are going to CALL you.
While there is no doubt some smartass marketing guru – working for a bank – first got the idea for sub-prime and, yes, deregulation had a lot to do with that, enough regulation and accountability remains [in spades] in the US banking industry to limit the exposure gained.
Mortgage loans are not as regulated. Storefront mortgage lending doesn’t even require licensing. It was left alone to “help” all those folks buying trailers to live in over the years. Another trap I won’t go into, right now.
As the greedy storefront lenders expanded and obviously made a bunch of bucks, they started grabbing extra bucks by going public – and that’s when banks and investment firms could jump back in. And did so with both feet.
I don’t know if Republican or Democrat investors predominate. After all, banks in Europe have been folded and gobbled up in the last few weeks over this. They were probably run by members of Christian Conservative parties. Greed doesn’t have party lines. Stupidity, on the other hand, tends to settle in among the reactionary.
@Poor Me
I would beg to differ. You may not be able to buy a house downtown in a big town but even in the NW where we have higher than average housing costs you can buy a pretty nice house making less than $50,000 a year. I know because I did.
MacBandit: You are so right about that, you can live well on 50K.
I’ll be the first to agree that the wide disparity between rich and poor represents systemic failures. But, with the exception of getting adequate health care and education in this country, the ‘poor’s and lower working class’es sense of entitlement in this country is ridiculous.
Owning a home is *not* a constitutional right. Having access to ready credit is *not* a requirement. Heck, having a TV, sneakers that cost more than $10, etc. is not an entitlement.
Let’s be honest for once… pretty much everybody looks at their slightly better off neighbors and wants to live like them, and will make stupid decisions to get parity. I grew up where my (poor) family of 5 lived in a two room apartment. Sucked, but ONLY in comparison to my better off neighbors. In comparison to vast, vast majority of billions of other people in the world and those that came before us, it was luxorious beyond belief.
Jump off soapboax.
>>#1 I returned to America in 2005 after 22 years so I had no credit
>>history which was worse than a bad credit history
What happened to the “global economy”? Mastercard and Visa in China don’t share credit history with their American counterparts? Jeez, you shoulda maxed out the cards and then skipped the country!
I wonder how the subprime industry would look if people learned to say “No”. Peoples ignorance about risk in finacial areas is appalling and leads to big problems everytime. Buying a home or anything else on a hope is bound to lead to tragedy.
#7 – tkane,
Since both parties these days are pro-business anti constituency, you almost have a point. However, one party is still screwing people faster than the other. I’m not hoping for great things from the Dems. I just hope to slow the hemorrhaging. Certainly, Hillary isn’t going to help much. However, if we have to get another Republican, Hillary is the best in the field.
Unfortunately, Hillary is just as religious and willing to legislate from religion as the rest of the Republicans. See “Hillary’s Prayer” in the current issue of Mother Jones, if you have a subscription. Or wait ’til it’s available for free online. It isn’t yet.
I would love to have a true liberal candidate to vote for. Perhaps Kucinich comes closest. But, as long as it’s dumb and dumber, I have no choice but to vote dumb otherwise, I’ve voted for dumber.
#14 “What happened to the âglobal economyâ? Mastercard and Visa in China donât share credit history with their American counterparts?”
I found out the hard way that they don’t. So unless I become a trading partner with the US…
I have thought about this – if I maxed out my US cards and stay out of the US for 7 years my credit history resets and I get a do-over! Gee beats working. Didn’t the bankruptcy laws change so people can’t do that?
On thing that doesn’t reset is traffic fines…as I found out! I had a minor fender bender just a couple of days before I left the US. The other driver and me thought is was no worry as both cars were junk and it was very minor. However a cop happened to see it and took our details. Well it seemed that when the cops checked my auto insurance I had none – so I was ticketed and was meant to appear in court. Of course I cancelled the auto insurance but who knows if they or me cancelled it on the wrong day.
As I never appeared in court the fine doubled to $200 and stayed on the books. A year before I moved back to the US I visited my folks in SD and went to get a SD drivers licence…it was declined and that’s when I found out about about the fine I never paid 21 years ago.
So the moral of the story is you can max out the cards and get a ‘do-over’ but don’t get a traffic fine in the process – that you will have to eventually pay! đ
Cheers
#8 LOL
Exactly what my old man did. At 70 with no income other than old age pension he convinced a bank to lend him 20 grand and give him a cc with 20 grand limit. He died 2 years later with the cc maxed and the loan unpaid.
The bank then proceeded to harass me for the money ( I was not the executor) until I called told them I was not responsible for their stupidity and said I would be contacting a lawyer.
#2 That was an interesting story. I know full well how screwed up our credit rating agencies are and soon S&P and Moody’s are going to get their asses sued off for how they wrongly evaluated the risk of some debt.
As far as this goes, “I needed a co-signer for the apartment lease even though I wanted to pre-pay the rent for one year – which surprised me to no end as where is the risk to them??”, I assume you have never trashed an apartment before. The risk is it’s a real legal hassle to toss someone out of an apartment when they have prepaid for it.
>>I love how a $50,000 a year job canât buy a house nowadaysâŚ
Oh, it can. It just can’t buy a $500,000 McMansion, something the borrowers, the lenders, and the Wall Street geniuses who bought into this idiocy apparently failed to recognize.
#20 – MM,
Failed to recognize? At least on the part of the traders, I think it’s more likely that they don’t give even one rat’s buttock, let alone an entire rat’s ass about anyone making less than $500k/yr. Some probably set the minimum much higher.
Seriously though, it depends where in the country we’re talking about. Many people paying AMT can not afford to buy anything larger than a walk-in closet in Manhattan these days. Prices here are literally over $1000 per square foot. And Manhattan realtor feet are smaller than the rest of ours.
Then, on top of those ridiculous prices, you have to pay either maintenance or common charges and real estate taxes. It’s pretty pathetic that someone making $150K/yr probably can’t afford to buy a one bedroom these days.
So, perhaps the traders (traitors?) have a different opinion of money from the windows of their multi-million dollar apartments, especially in the years of the $20MB boni that Goldman was giving out to their top traders a couple of years ago.
Lastly, the real question is, can $50K/yr buy a house in an area where the salaries are $50K/yr? Back to NYC, $100K/yr jobs are quite common, but unless a couple has two of those and no kids, they won’t be able to buy much.
>>I think itâs more likely that they donât give even one ratâs buttock,
>>let alone an entire ratâs ass about anyone making less than
>>$500k/yr.
I’m not talking about anyONE. I’m talking about the hedge fund magicians who buy and sell (or “bought and sold”, more precisely) these sub-prime pieces of toilet paper en masse.
>>Many people paying AMT can not afford to buy anything larger
>>than a walk-in closet in Manhattan these days.
Why on earth anyone (other than someone in Leona Helmsley’s tax bracket) would want to buy anything in Manhattan is beyond me. I’ve read the stories about 50-year-old couples making a combined $200K who have to go to Mommie and Daddie for help buying a 2-bedroom place. Anyone who owns in Manhattan these days has either 1) been there for a long time, 2) obscenely wealthy, or 3) a fucking moron. Manhattan may have been a cool place to live in the 60’s and 70’s, but the cost/ benefit ratio has gone so far over the top it’s a loser’s game.
On the other hand, $50,000/yr can get you a nice $95,000 three-bedroom in Wisconsin or Indiana or Illinois. It’s not Manhattan, but who makes $50,000 and lives in Manhattan other than welfare recipients?
#22 – MM,
I was talking about the people on the trading desks (not all CMOs are in hedge funds, AFAIK) that actually created the CMOs in the first place. It’s a beautiful thing actually. First they combine a boatload of like mortgages and divvy that up into tranches. The A tranche has the lowest prepayment risk. The E has the highest. No one wants the E tranche, so they pile a bunch of them together and cut that into tranches. The A tranche of a bunch of E tranches is not good, but is better than an E tranche. The E tranche of the E tranches is essentially toxic waste.
But, the upside is that the banks can lend out a huge pile of money, sell the debt, and lend out more money. This avoids banking regulations. It’s really quite nice. Oh, the economy might collapse because of it? People may go bankrupt? Housing values that have skyrocketed due to excess available debt might suddenly drop dramatically? Oh well, the bank already got their money when they sold the CMOs.
So, yeah. I was talking about the traders behind the deals. Corporations are actually made up of people after all.
And, your Wisconsin living may be fine. But, you didn’t really answer my question. Can people earn the $50K/yr there? Seems that 50K is just a few K above the median household income there (and in the nation), so probably OK. Interestingly though, NY State is actually a tad lower on the median household income scale. So these things probably vary too much by local region to ask these questions by state.
>>So, yeah. I was talking about the traders behind the deals.
Well, I wasn’t talking about the traders behind the deals or the hedge funds they work for. I was talking about the low-credit, bad credit, no-credit dimwits making $50,000 and getting sucked into buying a $500,000K McMansion. I’m sure the traders don’t care about them as individuals, but y9ou bundle together a hundred thousand or so, and all of a sudden the gleam appears in some Wall Street brainiac’s eyes that buying and selling these sanitary-napkin mortgages is a good way to turn an easy profit. This is what people make $35,000,000.00/year to do? After we kill all the lawyers, maybe the next goal should be the hedge fund managers.
As to whether people ‘can” make $50,000 and be homeowners, It would appear so. Since $50K is above the median, while 65%-80% of people in the US (depending) own homes, it seems like it’s possible.
My point was that NOBODY in Manhattan makes $50,000, unless they fit into one of the categories I enumerated earlier. Personally, I wouldn’t go within a country mile of Manhattan for less than $500,000/yr, ad that includes north Jersey, Westchester County, and Fairfield County (CT). And for Manhattan itself, that would need to include a parking spot AND a driver.
#24 – MM,
this is what people make $35,000,000.00/year to do?
Yes. And, just think of all the good they do for society to earn that.
As for you not coming to Manhattan, no offense, but good. We’re expecting another 900,000 residents in NYC by 2020. We’re ramping up infrastructure, building like mad, and still trying to reduce our carbon footprint despite the increased population. If we can count on you not to make it 900,001, good. Thank you.
#22- On the other hand, $50,000/yr can get you a nice $95,000 three-bedroom in Wisconsin or Indiana or Illinois.
Well, I realize we all have different values, but I’d rather impale myself on a fence post than to live in any of the places where you can buy a white bread 3 bedroom for 95K. I realize it is conveniently located 10 miles down the gravel road from the Piggly Wiggly and that the Sunoco Station on Rt. 8 is open Sundays in case you run out of Pall Malls, but it still isn’t a very good offer the way I see it.
#26 – OFTLO,
You’ve got me chuckling out loud in my cube. Stop it. You’re hurting me. Can I have the next fence post over?
#16 – scott
Kucinich has a really hot wife. She was the only person the cameras could keep focused on for any length of time during the last televised debate. Even when it wasn’t Dennis speaking, they cut to her. Damn! Can you imagine her as First Lady? She’d be the hottest First Lady since… Mamie Eisenhower? Lady Bird Johnson? Dolly Madison? Hell, she’d win hottest First Lady EVER hands down! And since it doesn’t matter which of these bozos/bozas (
Kucinich has a really hot wife. She was the only person the cameras could keep focused on for any length of time during the last televised debate. Even when it wasn’t Dennis speaking, they cut to her. Damn! Can you imagine her as First Lady? She’d be the hottest First Lady since… Mamie Eisenhower? Lady Bird Johnson? Dolly Madison? Hell, she’d win hottest First Lady EVER hands down! And since it doesn’t matter which of these bozos/bozas (*) we elect, shouldn’t we get a hot First Lady in the White House for the first time since forever? I wonder: is FLILF a word?
* – The bozos/bozas notation was meant to cater to both women and the Hispanic constituency.