Quit griping and spend your savings....now!

Those of us who thought that saving for our retirement was a good thing got some rather surprising news this week from someone who should be quite knowledgeable about such things.  This new paradigm  informs us that we have been wrong all along.

The rather aptly named Mr. Bean, the Bank of England's deputy governor, is trying to encourage "older households" that they should not expect to live off of their interest and that they have already benefitted from increases in the value of their properties.

Here's a quote from an interview that he gave to Channel Four News in the United Kingdom earlier this week:

"Savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit."

"Very often older households have actually benefited from the fact that they've seen capital gains on their houses."

Basically, Mr. Charles Bean is telling U.K. seniors to put up, shut up and spend, spend, spend!

He also stated that savers had benefitted from high interest rates in the past and that the Bank of England had deliberately lowered interest rates to force savers to spend.  The typical savings rate on a U.K. savings account has fallen from roughly 3 percent before the Great Recession to roughly one-quarter of a percent today, cutting income for many seniors who were relying on the interest from their low risk savings account to supplement their pensions.  So much for the idea of saving for your own retirement!

The idea of forcing savers to spend is a rather interesting one.  Seniors, many of whom are intimately acquainted with the economic woes of the Great Depression, tended to save for "rainy days" and have been generally less likely to use credit for items other than mortgages.  

As a carrot to get savers to spend, Mr. Mervyn King, the Governor of the Bank of England stated that while low interest rates were implemented to return the economy to normal levels as soon as possible, once the economy returns to a reasonable level of activity, interest rates will return to normal levels.  Basically, get out there, spend your capital and we promise that interest rates will eventually go up.  Of course, you'll have no savings left but that's not the Bank of England's problem, is it?

The idea that the governor and deputy governor of the United Kingdom's central bank lowered rates to help British savers spend gives me pause to ponder whether Mr. Bernanke, Chairman of the United States Federal Reserve and Mr. Carney, Governor of the Bank of Canada were part of a grand scheme to help relieve both Americans and Canadians of their savings by deliberately lowering interest rates to multi-generational lows.  Although they have never publicly said so, my suspicion is that they share a similar philosophy with the Bank of England.

As well, pardon me if I'm wrong but wasn't it overspending and excessive use of credit that got us into the Great Recession in the first place?  With attitudes like those of Mr. King and Mr. Bean, it is no wonder that our fiat currency world is in such financial straits.

As an aside, Mr. Bean and Mr. King are hardly suffering.  Mr. Bean's promotion in 2008 rewarded him with a 54% salary and benefits increase over the past year and he is now receiving £252,497 annually, very close to the average income for most U.K. pensioners I'm certain.  As well, his pension has accumulated a cash equivalent of £1.97 million.  While his boss, Mr. King, has refused a further salary increase for 2010 and 2011, his pay package stands at £305,368 and his pension has accrued £5.36 million, also quite close to the amount in an average savings account.  On the upside, neither the Governor nor the Deputy Governors qualify for bonuses.  Poor fellows indeed.

Vancouver B.C. - A really expensive place to live

Back in August, I did a posting on the least expensive real estate in the countries of Canada, the United States, Australia, New Zealand, Ireland and the United Kingdom. It turns out that Detroit, Michigan had the most affordable housing in the aforementioned countries. According to the study entitled the "6th Annual Demographia International Housing Affordability Survey 2010", Vancouver, British Columbia has the least affordable real estate among the 6 nations surveyed. Demographia calculates affordability by using the median house price divided by gross annual median household income. The higher the number, the less affordable the housing. In Detroit, the median multiple was 1.6; by comparison, Vancouver's median multiple was 9.3. In other words, a house that falls in the middle of the pack between the most expensive and the least expensive in Vancouver cost 9.3 times the income of a household whose income falls in the middle of the pack between the highest income and the lowest income. Demographia also defines housing affordability by using the same median multiple; when the median multiple is over 5.1, houses are considered to be "severely unaffordable". In that case, Vancouver is off the chart and living in another universe!

Here's a screen capture from the report showing the top 10 least affordable places to live:

According to the Canadian Real Estate Association, the average price for a house in Vancouver in November 2010 was $699,009 compared to the national average of $344,268.

Enough definitions.

As background information for those of you who aren't familiar with Vancouver, it is located on the west coast of Canada. It is Canada's third largest city and had a metropolitan area population of 2.38 million people in 2009. It is the fourth most densely populated major city in North America after New York City, San Francisco and Mexico City. It is often ranked as one of the most liveable cities in the world; it's climate is relatively mild by Canadian standards although it does tend to get abundant rain most of the year with dry months in July and August. Snow is rare and when it does fall, it rarely accumulates. The north and west side of the city border the Coast Mountains; in combination with the adjacent seascape, the area has few rivals for natural beauty. On the downside, the traffic from the outlying communities can be quite heavy but the recent building of a light rail transit system should help somewhat.

Here is a look at some of the houses available in Vancouver from the REALTOR.ca website. Let's begin with what would be considered a starter home.

Here's a floating 1120 square foot, 2 story, one bedroom, one bathroom home on a leasehold property (with moorage costs of $869) for only $149,000 in North Vancouver. When I searched for single family homes (excluding condominiums), this is the only property that came up over a large part of Vancouver, North Vancouver and West Vancouver.

When I changed the search terms to increase the maximum price to $200,000, this was the next single family dwelling on the list.  Once again, the home is a 900 square foot floating home located in North Vancouver with a leasehold moorage property (i.e. you don't own the "land" the home is located on).

That's all fine, but let's say that you really want buy a lawn mower and cut some grass. I had to increase the maximum price to $400,000 before I actually got a house that was located on a bit of terra firma.  Here it is:

It looks like a reasonably nice 2 story, 1150 square foot house that needs renovating. But (and it's a rather large but), please notice that it is one of three houses located on a single 55 by 122 foot lot, a lot that I would consider a rather standard city-sized lot. Each of the other two houses, found here and here are listed at $389,000! On the upside, maybe you can save a few bucks since you likely won't need to buy that lawn mower after all.

Now let's skip a few brackets and see what you can get for between $750,000 and $1 million.  Here's a nice looking detached 2 story on a 25 by 122 foot lot with a full basement rental suite, 5 bedrooms and 2 bathrooms. As a bonus, it's located relatively close to downtown Vancouver It does sound like the interior is in "original condition" and may need renovation. Should you happen to have $828,000 burning a hole in your pocket, this may be the house for you!

One last listing. I thought I'd take a look and see what a couple of million dollars would buy.  Here's a brand new 2819 square foot home located in tony Kitsilano close to the University of British Columbia. Kitsilano has some of the highest property values in Vancouver and some of the highest rental rates, yet it has a very low vacancy rate. The median household income in the neighbourhood is $67,795 (2006). This particular house has 6 bedrooms and 4 bathrooms and a legal 738 square foot two bedroom suite on the lower level. The house is located on a 33 by 122 foot lot, smaller than I like but then again, I prefer the privacy of country living. Should you happen to have something in the neighbourhood of $2.2 million lying around looking for a place to live, this is the house for you. As an aside, if your family income is around the median, the Demographia median multiple would work out to a nice solid 31. Recall that Demographia defines a media multiple over 5.1 as severely unaffordable!

Just in case you were wondering, the taxable value of the house is assessed at $529,000 and the 2010 property taxes are $3076.08. I guess if you have the $2.2 million, you really don't need to ask how much the property taxes are!

I hope that you enjoyed your little real estate tour of Vancouver. Having spent many years living in the west part of Canada and visiting Vancouver many times, it is definitely a world-class city.....but (and it's a big but), I still think I'd have trouble shelling out the kind of money necessary to buy a house there. But like they say, it's a lifestyle decision.

Ahmadinejad versus the World....again

Last night the President of Iran, one Mahmoud Ahmadinejad, spoke to the United Nations General Assembly.  During the speech, he referred to some of the issues surrounding the events of September 11th, 2001. His comments were so inflammatory that the delegations from the United States, Australia and several other European countries left their seats and walked out as he spoke.  Canada's United Nations delegation didn't even bother to show up.

Here are some quotes:

"...We now know that a blueprint for the creation of a global Pax Americana was drawn up for Dick Cheney (now vice-president), Donald Rumsfeld (defence secretary), Paul Wolfowitz (Rumsfeld's deputy), Jeb Bush (George Bush's younger brother) and Lewis Libby (Cheney's chief of staff). The document, entitled Rebuilding America's Defences, was written in September 2000 by the neoconservative think tank, Project for the New American Century (PNAC).

The plan shows Bush's cabinet intended to take military control of the Gulf region whether or not Saddam Hussein was in power. It says "while the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein...."

"...First, it is clear the US authorities did little or nothing to pre-empt the events of 9/11...."

"...From this it seems that the so-called "war on terrorism" is being used largely as bogus cover for achieving wider US strategic geopolitical objectives...."

"...The evidence again is quite clear that plans for military action against Afghanistan and Iraq were in hand well before 9/11...."  

Oops, please excuse the error.  I seem to have posted quotes from the wrong source.  The preceding statements were from a column written by Michael Meacher in the Guardian back in September 2003 that you can find here.  In case you weren't aware of Mr. Meacher, he was the United Kingdom's Environment Minister from 1997 to 2003 during part of Prime Minister Tony Blair's reign until he was "relieved of his duties" in June 2003.  He did declare his intention to run for the leadership of the Labour Party in 2007, however, he stood aside 2 months later.  It's important to remember that Mr. Meacher was part of the government that was the first to sign on to George W's "Coalition of the Willing".

In case you were wondering what President Ahmadinejad really did say, you can find the Iran government-approved text of his speech here.

A couple of actual quotes from the President's speech in closing and this time I promise that they really are his:

"...It was said that some three thousands people were killed on the II September for which we are all very saddened. Yet, up until now, in Afghanistan and Iraq hundreds of thousands of people have been killed, millions wounded and displaced and the conflict is still going on and expanding.  In identifying those responsible for the attack, there were three viewpoints. 

1- That a very powerful and complex terrorist group, able to successfully cross all layers of the American intelligence and security, carried out the attack. This is the main viewpoint advocated by American statesmen.

2- That some segments within the U.S. government orchestrated the attack to reverse the declining American economy and its grips on the Middle East in order also to save the Zionist regime.  The majority of the American people as well as other nations and politicians agree with this view.

3- It was carried out by a terrorist group but the American government supported and took advantage of the situation. Apparently, this viewpoint has fewer proponents...."

It almost sounds like President Ahmadinejad and Mr. Meacher were reading from the same script, doesn't it?

India - The Quiet Energy Elephant

When people think of the world's great energy consuming nations, Japan, the United States and China come to mind. One nation that seems to slip through the cracks is India.

India has 15 percent of the world's population with an estimated total of 1.1789 billion people by March 2011 according to India's National Commission on Population. According to the Energy Information Administration (EIA) of the United States Department of Energy, in 2009, India was the fourth largest consumer of energy in the world. India has insufficient domestic supplies of energy and is forced to import a great deal of its energy needs.

According to 2007 statistics, a breakdown of India's energy consumption by method finds coal and peat as the source for 40.8% of energy consumed, combustible renewables and waste at 27.2%, oil at 23.7% and natural gas at 5.6% . Nuclear (0.7%) and hydro-electric (1.8%) fall far behind the other sources although it is anticipated that India is in the process of ramping up its nuclear power program. In case you weren't aware, manure is a much-used source of energy in India and not only through the utilization of manure-to-methane biogas. Manure is also compressed with human hands into patties about the size of a large dinner plate and burned for heat after drying in the sun. During a visit to India in December, I often noticed a pall of rather acrid smelling, manure-generated smoke over some cities during the cold morning hours.

Electricity infrastructure in India varies greatly with location. Approximately 400 million people have no access to electricity in any form; urban residents have 93% access and rural residents have 50% access on average.

For the purpose of this posting, I'm going to examine India's oil production capability. India's oil exploration and production business is dominated by state-owned companies including Oil and Natural Gas Corporation Limited (ONGC), India's largest oil company and Oil India Limited (OIL) although since 2000, moves have been made to attract foreign investment and expertise.

According to the BP Statistical Review of World Energy 2010, at the end of 2009, India's oil reserves totalled 5.8 billion barrels, the second largest in the Asia Pacific region after China at 14.8 billion barrels. India's share of the total world oil reserves is 0.4% compared to its 15% share of the world's population. India's oil reserves are found in both offshore and onshore fields with most of its crude reserves being light and sweet ranging from 32 to 38 degrees API. In 2009, India produced 754,000 BOPD, a decline of 1.8% from 2008. India's oil production has ranged from 726,000 to 773,000 BOPD since 1999 suggesting that despite massive exploration efforts, especially in the Rajasthan area, production has likely peaked. India's oil reserves are primarily found in its offshore fields, the largest being Mumbai High located 160 kilometres west of Mumbai. This field produced half of India's domestic daily oil production in 2009, however, production fell 5.3 percent to 347,197 BOPD in November 2009.

India's oil consumption in 2009 was 3.183 million BOPD, a 3.7% increase from 3.071 millon BOPD in 2008. India's oil consumption has increased nearly every year since 1999 when consumption was 2.134 million BOPD. In the past decade, daily oil consumption has increased by 1.049 million BOPD or 49.2 percent. As it stood in 2009, the oil production/consumption shortfall requiring imported oil was 2.429 million BOPD an increase of 126,000 BOPD over the 2.303 million BOPD imported in 2008 (a 5.5% year over year increase in imported oil volume). In 2009, India was the world's sixth largest importer of oil; 76% of the country's oil needs were filled using imported oil. The EIA expects that by 2025, India will be the fourth largest importer of oil in the world behind the United States, China and Japan. Here is a chart from the EIA showing the production shortfall (net imports):

Now, let's compare India's oil consumption to that of China as posted here. China's population is estimated to be 1.3386 billion in July 2010 (source: CIA World Factbook) and, in 2009, they consumed 8.625 million barrels of oil or 3.148 billion barrels of oil per 365 day year. On a per capita basis, that works out to 2.352 barrels of oil per person per 365 day year. India, on the other hand, consumes 3.183 million barrels of oil per day or 1.1618 billion barrels of oil per 365 day year. On a per capita basis, that works out to 0.985 barrels of oil per person per 365 day year. One can readily see that on a per capita basis, India consumes 42 percent of the oil consumed by China.

Let's add the United States into the fray. With a population of 307 million people and oil consumption of 18.686 million BOPD or 6.82 billion barrels of oil per 365 day year, they are the world's largest single oil consuming nation.

Country Population Daily Oil Used Per Capita Annual

(e6) (e6 BOPD) Oil (bbls)

India 1,178.9 3.183 0.985

China 1.338.6 8.625 2.352

U.S. 307 18.686 22.22

You can quite quickly see that India's per capita annual oil consumption is, once again, 42% of that consumed by China and 4.4% of that consumed by the United States. Should India's consumption rise to the per capita level of China, they will consume 7.597 million BOPD requiring imports of roughly 6.8 million BOPD, an increase of 4.4414 million BOPD. This increase is roughly 5.6 percent of the world's current daily oil production.

As I noted in my posting on China's oil needs, world daily oil production has not changed markedly since 2004 and hovers around 79 to 80 million BOPD. More importantly, the world's reserve life index or reserves to production ratio has not increased since 1985 for the past 25 years has ranged between 40 and 45 years at current production levels despite massive exploration efforts in ultra-deep water and other non-conventional targets. Here's a chart from the BP Statistical Review showing the reserves to production ratio data:

In my posting on China, I noted that should China's per capita level of energy consumption approach that of the United States, their potential consumption of 35.87 million BOPD would require 45% of the world's current daily oil production. The issues with rising demand in India complicate the supply/consumption issue even further.

According to statistics for energy consumed from all sources from the International Energy Agency (IEA), in 2007 (the latest year that data is posted online), India consumed 594.9 million metric tonnes of oil equivalent, China consumed 1,955.8 million metric tonnes and the United States consumed 2,339.9 million metric tonnes. Should India's energy consumption reach that of the United States, they would increase their total energy needs by 393 percent and to reach China's level, their needs would increase by 329 percent.

It is becoming apparent that the politics of energy will shape the world for the coming decades. With China and India having nearly one-third of the world's total population, rapidly expanding economies and movement of tens of millions of their residents into the middle class, competition for finite supplies of coal, oil and uranium will likely become increasingly hostile as nations jostle to ensure their own energy security.

153 to 151 - The Yeas have it and the Gun Registry survives to see another day

Well, that's it for the great gun registry debate of 2009 - 2010. Bill C-391 was just defeated by 2 votes, thanks in large part to the NDP and the whipping of the Liberals.

I'd like to take just a quick last look at the issue.

Canadians have been conned by our elected ones into believing that the vote on Bill C-391 was split along rural-urban lines with John Baird even summoning the ghosts of the “urban elite”. By feeding us that line of propaganda, it made it appear that there was little support for the Bill among those in urban settings. Nothing could be further from the truth. An EKOS poll from November 2009 found that the societal fracture in the issue was along several lines:

1.) Only 46% of Canadians felt that all Canadians should have a legal right to bear arms with 54% feeling that gun ownership should be outlawed completely except for law enforcement officials. The split was along provincial lines with a poll showing that only 41% of Ontario residents and 36% of Quebec residents felt that it should be legal for ordinary citizens to own guns of any type compared to 62% in Atlantic Canada, 64% in the Prairies and 69% in Alberta.

2.) Supporters of the gun registry tended to be university-educated with 38% supporting the registry compared to 31% who supported abolishing the registry.

3.) Supporters of the gun registry tended to be Liberal or BQ supporters.

4.) Supporters of the gun registry tended to live in Ontario and Quebec.

5.) Supporters of the gun registry tended to be under 65 years of age.

6.) Supporter of the gun registry tended to be female.

7.) A majority of all Canadians (64%) believe that guns should be banned in urban areas.

From the responses, it appears that Canada is very divided on the gun registry issue, but definitely not only along rural-urban lines. Why didn’t Conservative politicians bring up the issue that 47% of male respondents wanted to abolish the gun registry compared to the 30% of women surveyed? Why didn’t they focus on pitting the 45% of Canadians 65 and older who favoured abolition versus the 29% of Canadians under 25? Why exactly did our politicians focus on the rural-urban issue? I honestly cannot answer that question except to say that perhaps the issue something visceral and historical but relatively harmless compared to pitting seniors against the younger crowd and men against women (and we all know that's a no-winner).

Interestingly enough, a very large 31% of respondents to the poll had no opinion suggesting that there is more ambivalence toward the issue than the media or our politicians would have us believe. It’s apparent that all of the talking points about the registry over the past 10 months have been just that; talk.

As Canadians, we have to be careful about what we believe, especially when we are using politicians as our source of information. Their primary goal is to get re-elected, nothing more and nothing less. If in the process they divide Canadians, sadly, that seems to be of little concern to them.

One last point. If the Harper government was convinced that it was a good idea to get rid of the gun registry, why did they let Candice Hoeppner introduce Bill C-391 as a private members bill rather than introducing it on the floor as a bill that could have been subjected to a vote of confidence? Or, was it that the Harperites knew that getting rid of the registry was a very divisive issue that was only going to split Canadians roughly in half and so they had it introduced as a weaker private members bill because they didn't want to trigger an election over an issue that was so contentious and probably a non-winner.

In any case, the issue now has the unmistakable stench of an election issue; the Harper government can now point out the fact that they kept one of their campaign promises from 5 years ago when we next go to the polls.

So that's it for the Great Recession?

On September 20th, 2010, the National Bureau of Economic Research (NBER), a Cambridge Massachusetts-based "private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works" released its report on the most recent recession (also referred to as the Great Recession). The NBER, founded in 1920, "is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community."

According to the Business Cycle Dating Committee of NBER, a trough in United States' business activity occurred in June 2009, marking the end of the recession that began in December 2007; the nadir of this trough marked the beginning of an economic expansion. From NBER's calculations, the most recent recession lasted 18 months making it the longest recession since the end of World War II. Prior to this most recent recession, the other longest recessions from 1973 to 1975 and 1981 to 1982 had durations of 16 months. This report follows this reportwhich stated that the peak in United States economic activity from the expansion that began in November 2001 occurred in December 2007, an expansion that lasted 73 months compared to 120 months for the previous expansion that took place in the 1990s.

I think that a quote from NBER would best explain exactly why and how they define the end of the recession:

"In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date." (my bold)

Here are the indicators NBER used to define the economic trough:

Macroeconomic Advisers’ monthly GDP (June)

The Stock-Watson index of monthly GDP (June)

Their index of monthly GDI (July)

An average of their two indexes of monthly GDP and GDI (June)

Real manufacturing and trade sales (June)

Index of Industrial Production (June)

Real personal income less transfers (October)

Aggregate hours of work in the total economy (October)

Payroll survey employment (December)

Household survey employment (December)

So basically, NBER is telling us that if the economy should fall into what some economists term a "double-dip recession", the second half of the "dip" would be a brand spanking-new recession. In fact, NBER does not even recognize the concept of a double-dip recession.

I do find it interesting that NBER does assess the duration of the contraction during the Great Depression to be 43 months from its peak in August 1929 to its trough in March 1933. Is it not possible that, if the economic data that NBER used for the 2007 - 2009 recession is revised downward in the future, that the length of this recession could approach that of the Great Depression?

Let's take a look at unemployment statistics from the Shadow Government Statistics website. I really like their viewpoint because they graphically display the U3 and U6 data together on one chart:

For those of you who aren't aware of the differences between U3 and U6, here are the definitions taken from the United States Bureau of Labor Statistics (BLS):

U3 - Total unemployed as a percent of the civilian labor force (official unemployment rate).

U6 - A broader measure summing the total unemployed, plus all persons marginally attached to the labor force plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

BLS defines persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, part of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Here are the latest statistics from the BLS website:

Yes, I do realize that unemployment is a lagging indicator. Try explaining that to the 14.86 million unemployed, millions of underemployed Americans, the 2.3 million households that have lost their homes through foreclosure and the million households that are in the process of losing their homes. I'm certain that the 9.6% of Americans who are unemployed (U3) and the 16.7% of workers who are part of the U6 broader statistic would agree with NBER; the recession is definitely in the past....for those who actually have full-time, well-paying jobs.

This recession could not have "ended" at a better time. With the United States public debt reaching $13.47 trillion, the American government could not afford to increase stimulus to spend its way out of a recession that was any lengthier. Fortunately, the interest on our public debt is still smaller than the GDP of the top 22 countries in the world at only $395 billion for the first 11 months of fiscal 2009 - 2010. I wonder if the government will have the ability to spend its way out of the next economic debacle? With an ever mounting debt and deficits, it's going to be a lot tougher for the next President to stimulate his or her way out of a recession.

While I realize that academics studying economics need to have the ability to define economic cycles, I would say that those of us dwelling in the real world would not say that the latest recession is over by any reasonable definition.

Execution by three IQ points?

Update: September 23rd, 2010


Despite more than 7300 appeals to stop the execution, Teresa Lewis was executed by lethal injection and died at 9:13 p.m. tonight according to authorities.  Her last words were to her stepdaughter Kathy "I want Kathy to know that I love her and  I'm very sorry." 


Original Posting


On Thursday September 23rd, the state of Virginia is set to execute its first woman prisoner since 1912. Teresa Lewis, 41, was found guilty of arranging to have her husband and step-son murdered by two men on October 30th, 2002 while they were sleeping in their trailer. The lives of Julian Lewis aged 51 and his son Charles aged 25 had been threatened in an earlier incident arranged by Ms. Lewis. Ms. Lewis has admitted to the crimes which she planned with the goal of collecting $250,000 in insurance money. One of the men who killed the Lewis's, Matthew Shallenberger who was Ms. Lewis's lover, was found guilty of the crime and committed suicide three years later while incarcerated. It is interesting to note that Mr. Shallenberger had an IQ ranging from 113 to 120. His intelligence level may have led him to use Ms. Lewis as a pawn to gain access to the life insurance payoff. Mr. Shallenberger apparently admitted in a letter that the only reason he had sex with Ms. Lewis was so that he could collect his portion of the insurance money. The other man convicted in the case, Rodney Fuller, admitted guilt and was spared the death penalty and given multiple life sentences.

The Governor of Virginia Robert McDonnell, a strong advocate of the death penalty, stated that he will not commute the death penalty in this case so Ms. Lewis's last hope is an appeal to the United States Supreme Court.

One very controversial issue with this case is Ms. Lewis's intellectual level. She has an IQ of between 70 and 73 (depending on the results of the examinations administered) putting her in the "borderline intellectual functioning" range which is defined by having an IQ of less than 70. Eight years ago, the Supreme Court ruled that the execution of the "mentally retarded" is unconstitutional because it constitutes excessive punishment under the Eighth Amendment.

Here's what the United States Supreme Court wrote eight years ago in Atkins v. Commonwealth:

"The lesser culpability of the mentally retarded offender surely does not merit that form of retribution..."

It is also apparent that defining who is mentally disabled is far more difficult than it would appear to be as admitted by the Supreme Court. Here's their definition:

"“Mentally retarded” means a disability, originating before the age of 18 years, characterized concurrently by (i) significantly subaverage intellectual functioning as demonstrated by performance on a standardized measure of intellectual functioning administered in conformity with accepted professional practice, that is at least two standard deviations below the mean and (ii) significant limitations in adaptive behavior as expressed in conceptual, social and practical adaptive skills."

The Supreme Court also left it up to individual states to "develop appropriate ways to enforce the constitutional restriction upon its execution of sentences.".

Ms. Lewis will also be the first woman executed in the United States since September 2005 and only the 12th executed since 1976. Since 1900, only 50 women have been executed in the United States and currently, 61 women are residing on death row.


Reference:


http://www.lexisone.com/lx1/caselaw/freecaselaw?action=OCLGetCaseDetail&format=FULL&sourceID=bdjcca&searchTerm=eOYS.NIEa.aadj.edfa&searchFlag=y&l1loc=FCLOW